The special election won by Democrat Kathy Hochul in New York's heavily Republican 26th Congressional District had national Democrats jumping for joy. Apparently, Paul Ryan's plan to turn Medicare into a voucher program was not at all popular up there in Erie County, and Democrats expect similar feelings extend nationwide. Probably, they're right.
Republicans claim Democrats "misrepresented" the Ryan proposal. Frankly, though, their chief problem seems to be that people understood all too well: just eliminate Medicare, the government insurance program, and replace it with a voucher to buy private insurance. Government savings only can come from voucher amounts always being significantly less than policy premiums. Those who can't afford to pay the difference wind up with no insurance, so they would not even be using their vouchers — leaving even more money to distribute in the form of tax cuts for the rich.
Republicans are right, however, in pointing out that Democrats have not offered a real alternative for reducing Medicare costs. The Obama plan, such as it is, depends mostly on reducing payments to providers — which logically would result in fewer providers accepting Medicare. We are still waiting the administration to suggest a replacement for the cost inflating fee-for-service model, which encourages providers to provide many unneeded tests and unproductive treatment protocols.
The chief reason Medicare is so costly, though, is that the people using it are older and sicker than the general population. To bring costs per patient down, the most sensible thing would be to bring younger, healthier individuals into the pool. In the past, I've recommended selling Medicare policies to major employers who wish to provide coverage to their workers. Since Medicare does not have to advertise nor pay out profits to stockholders, it ought to be able to offer real competition to private insurance companies. To stay competitive, the privates would either have to cut rates or offer better coverage and service.
Yes, this would look a lot like a first step towards a single-payer system, but if the private sector really is so much more efficient than government, it just might be able to steal away Medicare's customers — including the ill and the elderly. Now wouldn't that be a triumph for the free market?