The House Republicans are likely to introduce the ability for Medicare recipients vouchers to shop for private insurance as a part of their budget plan this year. The plan, which is called “Premium Support” or “Medicare voucherization”, is an attempt to use market forces to help bring down health care costs.
Most Democrats largely reject such proposals due to concerns that it will pass on extra costs to beneficiaries, as well as granting beneficiaries less benefits overall. One exception to that is former Clinton administration Treasury Department official Douglas Elmendorf, who has voiced support for such plans, if done correctly.
More from a Bloomberg BNA interview with Elmendorf:
In a recent interview with Bloomberg BNA, Elmendorf said premium support was one way to use market forces to bring down health care costs.
“If we’re going to restrain the growth of health spending in this country in a way that I think we should, then we need to either give the government more power or we need to strengthen competitive forces,” Elmendorf said. “Given the views of people in this country, strengthening competitive forces is likely to be more acceptable to more people.”
Elmendorf said premium support would be similar to the existing Medicare Advantage program, in which private insurers compete for Medicare recipients to sign up with them, often as part of a health maintenance organization or preferred provider plan, as an alternative to traditional fee-for-service Medicare.
“We have private providers covering Medicare beneficiaries through Medicare Advantage, but the sort of competition that creates can be strengthened by moving toward a premium support system,” Elmendorf said. “I think a premium support system with the right sorts of protections can increase competitive pressure while still ensuring that Medicare beneficiaries receive the sort of health care that we as a society think they should receive.”
A system is already in place to make vouchers optional for Medicare beneficiaries starting in 2024 as a part of the 2015 budget.
Photo by Bob Jagendorf via FLickr CC License
