In essence, Medicare enrollees would receive a voucher to either purchase traditional coverage in Medicare or buy into a private insurance program. The idea sounds simple enough, but it’s actually fairly radical. Republicans want to transform Medicare from a fixed benefit to a fixed contribution. Beneficiaries would have to make up the difference between the value voucher and the cost of a particular health insurance plan — an amount that will only increase over time as health care costs outpace the value of a income-based voucher. The voucher will buy less coverage every year, forcing seniors to pay more for the same coverage. Essentially, they’re shifting the cost of insurance from the government to the individual.
As one analysis of a voucher proposal concluded, “this approach would undermine the basic protections offered by Medicare as a social insurance program, by relegating lower-income beneficiaries to lower-cost, and possibly lower-quality, plans.”
But that’s only the beginning. If Medicare becomes a fixed premium program, it will be much easier for Washington to control Medicare costs by simply trimming the level of the fixed contribution — undermining the health security of America’s poorest senior citizens.