November 25, 2011
The NYT claims that plans that could raise the cost of Medicare equivalent policies for seniors by $34 trillion are gaining increasing support in Congress. These plans involve replacing Medicare with a voucher. This leads to higher costs both because the administrative costs of private plans are far higher than Medicare and they are likely to be less effective in controlling costs.
The Congressional Budget Official projected that a Republican plan along these lines, that was approved by House earlier in this year, would raise the cost of Medicare equivalent polices by $34 trillion over the program’s 75-year planning horizon. While this plan would save the government money by reducing its payments for Medicare, it would mean that future generations of workers would pay far more for health care in their retirement. The cost of Medicare equivalent policies would far exceed the typical retiree’s income by 2050.
It would have been helpful if this article had pointed out that these proposals imply both a huge increase in health care costs to beneficiaries and an increase in costs to the country as whole. Virtually all research shows that these sorts of plans will make the country’s health care system considerably less efficient.
Comments