For Medicare, We Must Cut Costs, Not Shift Them
By EZEKIEL J. EMANUEL
NYT
Suddenly, everybody is talking about turning Medicare into a voucher program. It’s not a new idea. It’s been two decades since wonks first started talking seriously about “premium support” and the idea of replacing Medicare with a competitive marketplace in which older people could shop for health insurance. But the idea got new life last week when Senator Ron Wyden of Oregon, a Democrat with a long record on health care, joined Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee, in suggesting that such a scheme was the best way to cut health care spending while providing for the medical needs of the elderly. The plan resembles a proposal that Alice Rivlin, who was budget director under President Clinton, and Pete Domenici, a longtime Republican senator, have also recently been promoting.
Nobody questions that Medicare needs to be reformed. According to the Congressional Budget Office, by 2035 health care will be 26 percent of the total economy, and Medicare alone will be about 6 percent. If nothing is done to check its growth, federal health care spending will consume almost 40 percent of the budget, and could eventually bankrupt the government. But premium support plans aren’t the way to reform Medicare.
In the Wyden-Ryan proposal, the government would give each older citizen a certain amount of money — basically, a voucher — with which to buy a health insurance policy. The recipients would decide which policy to buy, based on whatever combination of benefits and price they found most appealing. If they chose a plan that cost more than the voucher, they would have to pay the difference. An earlier premium support plan by Mr. Ryan would have totally replaced traditional Medicare. This latest one would preserve Medicare as an option — although, critically, it would not guarantee that the voucher was enough to make Medicare affordable or ensure that private plans could not design a benefits package to attract only the healthiest patients. If this doesn’t sound like the kind of sweeping reform that will save us … it’s because it isn’t.
Truth be told, I am not opposed to the government’s providing Americans vouchers with which to buy health insurance. In 2005, Victor Fuchs, a health economist at Stanford, and I proposed a voucher plan that would apply to all Americans, and I still believe that universal vouchers could cut the cost of health care. But premium support for Medicare beneficiaries alone will not.
(More here.)
NYT
Suddenly, everybody is talking about turning Medicare into a voucher program. It’s not a new idea. It’s been two decades since wonks first started talking seriously about “premium support” and the idea of replacing Medicare with a competitive marketplace in which older people could shop for health insurance. But the idea got new life last week when Senator Ron Wyden of Oregon, a Democrat with a long record on health care, joined Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee, in suggesting that such a scheme was the best way to cut health care spending while providing for the medical needs of the elderly. The plan resembles a proposal that Alice Rivlin, who was budget director under President Clinton, and Pete Domenici, a longtime Republican senator, have also recently been promoting.
Nobody questions that Medicare needs to be reformed. According to the Congressional Budget Office, by 2035 health care will be 26 percent of the total economy, and Medicare alone will be about 6 percent. If nothing is done to check its growth, federal health care spending will consume almost 40 percent of the budget, and could eventually bankrupt the government. But premium support plans aren’t the way to reform Medicare.
In the Wyden-Ryan proposal, the government would give each older citizen a certain amount of money — basically, a voucher — with which to buy a health insurance policy. The recipients would decide which policy to buy, based on whatever combination of benefits and price they found most appealing. If they chose a plan that cost more than the voucher, they would have to pay the difference. An earlier premium support plan by Mr. Ryan would have totally replaced traditional Medicare. This latest one would preserve Medicare as an option — although, critically, it would not guarantee that the voucher was enough to make Medicare affordable or ensure that private plans could not design a benefits package to attract only the healthiest patients. If this doesn’t sound like the kind of sweeping reform that will save us … it’s because it isn’t.
Truth be told, I am not opposed to the government’s providing Americans vouchers with which to buy health insurance. In 2005, Victor Fuchs, a health economist at Stanford, and I proposed a voucher plan that would apply to all Americans, and I still believe that universal vouchers could cut the cost of health care. But premium support for Medicare beneficiaries alone will not.
(More here.)
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