Expanding Medicare

Robert Kuttner’s Column Left (Jan. 11) revives Rep. Pete Stark’s intelligent and effective proposal to expand Medicare to the entire population in stages, by adding each year certain age groups, until everybody is covered.

Having spent several decades in the insurance business, I was imbued with the mantra that insurance is based on the law of large numbers and works best, the larger the number. What can be larger than the entire population?

There has been a lot of scare talk about Medicare going broke. While these allegations are exaggerated for political reasons, if Medicare faces difficulties, the reason is simple: Insurance companies milk people and collect their premiums during their younger years, when they are healthier and have fewer medical expenses. When people reach 65 and tend to have more medical problems, insurance companies keep the past profits, terminate the coverage and dump their policyholders on Medicare.

By covering the entire population, the premiums or contributions collected during the younger years will create the necessary reserves for the later, costlier years. This is exactly how the millions of commercial life insurance policies sold currently work.

Will President Clinton have the fortitude to propose that simple and self-evident solution instead of proposing an unaffordable $300-$400 monthly premium for 55-year-olds?

ARIS ANAGNOS

Los Angeles