As Long As We’re Privatizing Medicare…

Here’s something I don’t understand about Paul Ryan’s plan to eliminate Medicare, replace it with a program of vouchers for old people to use to buy health insurance, and then cut spending my ensuring that the value of the vouchers doesn’t grow as fast as the cost of health care — why not just give people money?

I don’t think “just give people money” is always the right idea in every circumstance. I can understand why you might want to give mental health services to someone rather than cash. Or you might pay for a child’s health care or education rather than cut a check as a form of investing in the future. But of all the demographic groups to be paternalistic toward, old people seem like the worst possible option. You might support Medicare rather than cash grants for standard left-wing reasons — you think health care is a right, or you think single payer systems are more efficient. But if you’re Paul Ryan or a Ryan-loving rightwinger who wants to dismantle Medicare then why not simply dismantle Medicare? Instead of an insurance voucher that groups at GDP+1 percent, give people a flat cash grant that grows at GDP+1 percent. If grandma wants to spend that money at the hospital, good for her. If she wants to spend on on heroin or a television, then that’s good for her too.

Ryan’s decision not to embrace the full logic of his plan is probably overdetermined. His plan is largely designed with the goal of obscuring its meaning, “saving” money on old people’s health care by simply refusing to pay for old people’s health care. Going to cash clarifies this point in a way that Ryan Roadmap may find undesirable. In addition, doing it Ryan’s way is considerably more favorable to health insurance companies and hospital CEOs.

But I think discussion would be greatly advanced by trying to do more to separate the question (a) “how much money should we spend on old people” from the question (b) “what share of that money should be earmarked from health care” from the question (c) “how should health care financing be organized?” I’m inclined to be generous to retirees and to say that single-payer health insurance is an efficient risk-pooling mechanism, but I’m highly (and increasingly) sympathetic to the view that (b) needs more scrutiny.