In my view, the question is not whether you like vouchers are not. Vouchers are inevitable, given the alternatives. Alternative 1 is to keep what we have, which is an open-ended commitment to reimburse health care providers for all procedures performed on people over the age of 65. That is not feasible–the budget blows up. Alternative 2 is to have government impose strong rationing of medical services to seniors. I think that is an unlikely alternative. It’s not just that I think that government would do a poor job. When it comes down to it, do politicians really want to be put in that position?
I am strongly sympathetic to this view. On one level vouchers do seem like the most realistic form of rationing. But, I wonder whether they are politically stable.
Are we not just committing to a regime in which voucher sizes are constantly raised? Won’t political ads in 2050 simply say: “The biggest problem facing America today is the failure of vouchers to keep up with insurance rates, leaving millions of hard working seniors without life saving care”
I just don’t see how the government can credibly commit to low voucher levels. The government can’t even credibly commit to lower reimbursement rates for MDs. Some way or another we have to cut off excess price growth at the source and I am unconvinced that vouchers will do it.