The most helpful piece I've read on Paul Ryan's proposal suggests that a voucher system for Medicare may be popular – but it likely won't cut costs, as the history of Medicare Advantage shows. Money quote from Austin Frakt:
The politics of Medicare are such that Ryan’s idea, paying for care entirely through private plans, costs more. That's not due to a market failure, but a political one. Congress likes to spend money; insurers, providers and beneficiaries like to receive it. Congress spends even more when it can satisfy those interests under the guise of a seemingly pro-market, pro-competitive program. When it comes to cost control and considering the political calculus of Congress, vouchers and Medicare don't add up.
The argument seems to be that private insurance companies have so much political clout that they would be a more formidable impediment to cost-control than traditional, single payer Medicare. That seems defeatist to me. And, as Krugman points out, there is a very strong and simple mechanism for cost control in the Ryan-Rivlin proposal:
I’m sure that the Republicans will claim savings — but those savings will come entirely from limiting the vouchers to below the rate of rise in health care costs; in effect, they will come from denying medical care to those who can’t afford to top up their premiums.
Yep: seniors will have to accept limits to the care they receive. And instead of the government rationing, they will just have vouchers that do not keep up with the price of cutting edge medicine. That should not mean abandoning the cost controls in health insurance reform, and constant exerimentation to make the health sector more efficient. And such an austere remedy requires, to my mind, sacrifice from those who earn over $250,000 a year.
