Under the House Budget Committee plan: (i) Traditional Medicare would end for everyone turning 65 in 2022 or later. (ii) Newly eligible Americans would receive a voucher worth $8,000 on average. As people aged, their vouchers would be increased to reflect increasing use of health care. The value of all vouchers would be indexed to consumer prices. Vouchers for the 8% of enrollees with the highest incomes would be reduced. (iii) Low-income Medicare beneficiaries (“dual eligibles”) would cease to be covered by Medicaid. Instead, they would get a medical savings account equal to $7,800 (also indexed to track consumer prices). (iv) The rest of Medicaid would become a block grant, also indexed to consumer prices.The plan would repeal all major elements of the Affordable Care Act (ACA), including subsidies, Medicaid extensions, insurance exchanges, and requirements that businesses provide insurance and that individuals buy it.
Now this is akin to selling options where the Government hedges itself. Now if we look at people, they fall into the following categories related to health care usage:
1. Young and Unfortunate: This would be the young who come down with some deadly disease like leukemia or who have some severe disability. Unfortunate and costly but not really that many and society has agreed to help them.
2. Middle Aged Bad Luck: These are the group who are mid life and are struck with say breast cancer. Bad genes, bad luck, whatever, but they did nothing that got them there and they are hit in the middle of their lives. Again we agree to help.
3. Life Style Choosers: These are the drinkers, smokers, eaters, and other life style based diseases. Type 2 Diabetes and Obesity account for almost 15% of this total. The problem here is that their costs remain. Unlike the first two who often die or are healed, this group takes a long time to die and their costs grow greater each year as do their numbers. Somehow this should be an issue but is not.
4. Older and Unlucky: This is the group with Parkinson's, and other debilitating diseases of old age as well as cancers hitting before 75. They may have breast, colon, pancreatic, kidney, and other cancers. Some may be mitigated against others not so. Alzheimer's disease is in this batch as well. This is the target for Medicare. It is catastrophic.
5. The Real Old Folks: It is often the case that when one gets to say 75 with no disease then there is a good chance you will hit 90 and drop of a plain old heart attack or the like. But if somehow we keep them away from heart attacks then perhaps they die of a cancer, more costly. Also more painful. This group may very well be kept off of the armory of blood thinners and pacemakers, and just let nature take its course. This of course is a personal choice but it should be an informed personal choice.
Thus Medicare is really targeted at those who get old and are unlucky. It has been expanded to the Life Style Choosers because we often can keep them alive. The drinker, the smoker, the obese individual, we can pump them up and treat their symptoms and it adds to the costs. In addition we have a group who want every little discomfort remedied. Yet at what cost?
Aaron presents the argument in a superb manner. Medicare serves a purpose. It has gotten out of control, but so has all health care. Vouchers are rant with problems. The solution in my opinion is not a voucher.
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