Vouchers have been proposed as a solution to unsustainable increases in the cost of Medicare. The Republican-backed proposal would provide each person eligible for Medicare after 2022 a voucher, a set amount of money to purchase health care insurance.
By fixing the value of a voucher, rising Medicare spending can be controlled. However, fixing the value of a voucher will not control the unsustainably rapid rise in the cost of health care overall.
Notably, adopting vouchers will not ensure that the cost of health care for the elderly is contained. Analyses by the Congressional Budget Office indicate that a person retiring in 2022 and using a voucher to purchase Medicare-equivalent insurance would, on average, pay $5,700 per year more than if they had enrolled in traditional Medicare.
The factors used to adjust for inflation will shift an increasing portion of the costs to the elderly and disabled as time goes along.
One might say, "too bad for the old folks." Yes, too bad indeed, as over the projection interval (2022-2084), vouchers promise to save the government $5 trillion while costing the elderly and disabled $30 trillion to $40 trillion more than under traditional Medicare. This is not a good bargain.
I worry about the debt we will pass on to our children and grandchildren, but reducing government debt while imposing much greater costs on vulnerable individuals is not the right solution. We need to do better.