The Inevitability of Medicare Vouchers
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?
So, one way or another, we are going to get to a voucher system, in which seniors ration their own use of medical services. There are many potential problems with it, and it will take a lot of thought and a lot of trial and error to get to a system that balances collective risk-sharing and compassion with individual responsibility and fiscal reality. But in the end, it is the most realistic approach.
I wrote an op-ed making this point in 2008, which the Wall Street Journal accepted, but never printed. Not that I’m bitter about it or anything.