Controlling the costs of Medicare is a big line item in both President Obama’s and Paul Ryan’s budgets. And for good reason, spending on Medicare programs currently accounts for 12 percent of the federal budget, but, as the Kaiser Family Foundation points out, it “is projected to represent a growing share of the economy, federal spending, and the nation’s total health spending” in the decades to come.
Yet the two budgets propose to control for rising health care costs in very different ways. Paul Ryan’s plan would introduce market forces by converting Medicare to a voucher program, while President Obama proposes to put all his eggs in the bureaucratic basket.
Peter Suderman at Reason makes an excellent point on why betting on bureaucrats won’t work:
It’s also a bet that better, smarter bureaucrats can help rescue the country and its most expensive programs from fiscal disaster. Obama is right to recognize the problem posed by mounting federal debt. But too many of his proposed reforms rely on faith in government to fix its own problems. If fiscal self-rehabilitation were that easy, we wouldn’t be facing a crisis. Government got us into this mess. It’s not going to get us out. Read more here.
Tyler Cowen offers his modest solution to giving seniors more choice in health care decisions and converting them into an active constituency for health care cost control. In the process he counters the NYT’s Paul Krugman who is very happy riding the ObamaCare bandwagon:
Paul Krugman calls for a public provision option in Medicare, a bit like the VA system. He doesn’t mention letting people choose some cash instead. We have gone from “Free to Choose” to “Free to Choose more government.”
He makes a good point at the end: “And what would terrify the right, of course, is the likelihood that genuine socialized medicine would actually win that competition.”
What would terrify the left, of course, is the likelihood that genuine privatized cash would actually win that competition. Read more here.
Lastly, the Cato Institute has a timeless article on what causes the cost increases in Medicare and why vouchers are a good idea, and the only way to protect seniors from bureaucratic rationing:
Congress should end traditional Medicare and give each enrollee a voucher to purchase the health plan of his or her choice. Subsidizing Medicare enrollees through fixed-dollar vouchers would give enrollees more control over their medical care, encourage them to be more cost conscious, spur innovation by eliminating Medicare’s price and exchange controls, and contain federal spending. …
Vouchers are the only way to protect Medicare enrollees from government rationing of medical care. Congress has no choice but to reduce Medicare spending. Only vouchers can give Medicare enrollees the freedom to retain the coverage and medical services they value most. Otherwise, politicians and government officials will decide which medical services enrollees will and will not receive. Read more here.