Howard Gleckman trashes the GOP’s Medicare plan. Medicare vouchers would only save money if seniors use less healthcare or if insurance companies ration care:
What if insurance companies ration care? The theory sounds great: Insurers that provide the most cost-effective care can lower premiums and attract more buyers. But as we learned in the disastrous HMO experiment of the 1990s, there is a fine line between managing care (a very good thing) and cost-cutting. Properly coordinating care for seniors with multiple chronic diseases may both save money and improve health outcomes. However, the perception that insurance companies were merely slashing benefits to boost profits inspired a consumer revolt two decades ago. The result: HMOs largely disappeared and little has been done to control the long-term growth of medical expenses.
You either ration by price or by regulation. Usually, I’d back the former.
But the private sector market in US healthcare has revealed far, far higher costs and cost increases than equivalent systems in the rest of the developed world. Which brings us back to rationing. I fear there is no way out of this. Yes, we can do all we can to shift incentives to better and more efficient care – and the ACA has a lot of mechanisms to try and do that. But I don’t believe it will be anywhere near enough to avoid a fiscal disaster, given the increasing numbers of seniors and increasing life-spans and accelerating medical technologies. The free ride is over.
So I’ve shifted my own position to what might be called the left, but which, from a fiscal perspective, is actually on the right. Medicare needs more means-testing and more heavy-handed rationing. Private insurance companies will equally have to ration to remain affordable – until, one suspects, the logic of the crisis forces the US to move to single-payer. Even then, my Tory pessimism suggests we will need some major tax hikes, and defense cuts to boot. It’s all gruel and no gravy. Is America capable of understanding that, let alone embracing it?
Or is decline going to accelerate?
The Dish 