Medicare Reform – Vouchers – Viable or Not?
Is this simply a shift of the crisis from the Federal Budget to our Senior’s Budgets? I have other concerns too.
The budget proposed by Representative Paul Ryan, chairman of the House Budget Committee, includes a proposal to replace the current Medicare health insurance for the elderly with a voucher given to those newly eligible for Medicare after 2022. Seniors could use that voucher to purchase health insurance on the open market. From the standpoint of budget management this has clear benefits. Congress can decide how much they are willing to spend on these coupons, disburse them to our older Americans, and carry on with trying to balance the budget. In estimates I have seen this essentially shifts the escalating costs of health care from being a budget dilemma for the federal government to a budget dilemma for many older Americans, who could end up spending a much higher portion of their Social Security check each month on health insurance premiums than they would under the current Medicare plan. Besides this cost shift, I have other major reservations about this type of plan.
- How will the issue of getting health insurance when you turn 65 be managed if you have major ongoing health problems. If you have cancer, advanced coronary disease, or any of numerous expensive medical conditions, will you be able to automatically enroll in any participating plan, or will some plans be able to exclude the sickest older Americans, leaving the “sick pool” of patients to buy more expensive plans, or not find insurance at all.
- How will emergency rooms, hospitals, etc. deal with older Americans who decide not to buy health insurance with their coupons. Will there now be a big new segment of Americans who are uninsured, those elderly who feel they cannot afford the difference between the coupon amount and a health insurance plan? If so will hospitals be required to accept these patients knowing they cannot be paid?
- What criteria will the government use to decide on the amount of the coupons? Will it bear any relationship to the actual cost of the insurance plans available to seniors, or will it be based on some other predefined schedule? If so I can see our seniors put in a position very similar to the one physicians have been facing with unacceptable premiums leading congress to put in place temporary fixes like the ones we read about every few months.
- Will insurance plans for seniors be truly free market options, or will there be mandated coverage of various services. I can see great political pressure from various constituencies to get their services covered. Examples might be chiropractic, physical therapy, prescription drugs, or diabetic supplies. Will seniors be able to purchase a plan tailored to their needs, or will everyone be forced to purchase a one-plan-fits-all type plan. For some with a high net worth a catastrophic health care plan with a high deductible might be the best option. For others this would not work at all. If the cost of a catastrophic health care plan is less than the coupon cost, could the senior put the excess in an health savings account?
I’m sure many of you have other issues, but these questions make me very reluctant to be in favor of scrapping the current Medicare plan and simply offer our seniors a voucher to use to buy their own health insurance.
I’d love comments on this post to start a discussion of this topic.