US scans medicare option to allow private coverage

The Reagan administration says it is considering a major change in medicare that would allow the 29 million recipients to drop out of the program and get vouchers instead to buy private health insurance.

The change--just one of a number of health care policy options being considered--would not force recipients off the rolls, but would instead give them a choice and provide competition among private insurers that could help hold down health care costs. The present government program reimburses doctors and hospitals for "reasonable charges," but provides the health care industry no competitive incentive, backers of the voucher system say.