History of Medicare vouchers

The history of Medicare vouchers, as told by Dan Diamond, is below. In his piece, Diamond also succinctly summarizes my take on them (not included in the following quote, so follow the link).

The very first issue of Health Affairs in 1981 reviewed the debate to offer vouchers for Medicare beneficiaries. The proposal was among five tactics considered by HHS that year to slow what was seen as unbearable health cost growth for the then 16-year-old program.

In the past three decades, the idea has flickered in and out of popularity, and even bounced between political parties.

Kaiser Health News notes that President Clinton’s National Bipartisan Commission on the Future of Medicare floated a voucher model in the mid-1990s but never advanced the recommendation; participating legislators also failed to push a stand-alone voucher bill. As a presidential candidate in 2000, George W. Bush supported a privatization approach for Medicare that would have encouraged vouchers for seniors.

Mainstream politicians have increasingly avoided the voucher model because it’s seen as politically damaging. Kaiser Health News notes that seven out of 10 Medicare beneficiaries currently oppose the idea of vouchers for the program. Of late, Medicare vouchers have been the province of think tanks and fringe presidential candidates like Democrat Mike Gravel.

The closest that vouchers came to this White House was when Ezekiel Emanuel — a physician and bioethics expert — became one of Obama’s top health policy advisers ahead of the reform debate. Emanuel, who left the White House last year, in 2007 advocated replacing the current health care system with a plan that would allow people to buy health coverage with vouchers.

It’s almost comical how misunderstood “vouchers” are. When one recognizes that subsidies to plans are vouchers then Medicare is clearly voucherized today. Even FFS Medicare is subsidized, hence voucherized. There’s nothing new about voucherization schemes except what plans qualify for the subsidization and how the subsidies are set and grow over time.


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