Could a voucher system replace Medicare?
If Democrats can stop defending Medicare, and Republicans allow the 2010 health law to take effect, a voucher system might work.
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But once all the elements of the ACA were pulled together, there would be no need for Medicare. Seniors would be able to buy affordable private coverage through the same sort of exchanges as tens of millions of working people. Insurance companies would compete on benefits and price and, importantly, take on the burden of cost containment.Skip to next paragraph
Howard Gleckman is a resident fellow at The Urban-Brookings Tax Policy Center, the author of Caring for Our Parents, and former senior correspondent in the Washington bureau of Business Week. (http://taxvox.taxpolicycenter.org)
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The idea is not as radical at it sounds. Today, in fact, millions of seniors participate in a similar model when they buy private Medicare Supplement (Medigap) insurance. Others have enrolled in Medicare Advantage plans—a private insurance alternative to traditional Medicare (although one where subsidies are far more generous than are likely under a broad voucher system). Federal employees, including members of Congress, are also covered by subsidized private insurance they buy through an exchange-like market.
Rivlin gets all this. But, oddly, while many Republicans support major Medicare restructuring, they are doing everything they can to destroy the very system of universal private insurance that would make vouchers feasible. The question to ask them: What private insurance structure do they imagine would replace Medicare? Somehow, I don’t think medical malpractice reform and health savings accounts will do the trick.
So here’s the first step to a deal: Republicans call a cease-fire in their partisan war on Obamacare and Democrats stop defending a Medicare system that is not only busting the budget but is failing chronically–ill seniors.
Building this structure will not be easy and many key details have to resolved. How big would subsidies be, especially for very poor seniors; what benefits would be offered; and how would the exchanges work for elderly buyers? Resolving these complex issues will take the best minds of both parties working together. Any takers?
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