Thursday, November 18, 2010

Change Medicare To A Health Insurance Voucher Or Unrestricted Elderly Tax Credit?

My comment on Econlog blog, "Voucherization of Medicare" by Arnold Kling about The Washington Post article about Rep. Paul Ryan and Alice Rivlin's proposal to switch Medicare to a health insurance voucher system, "Deficit commission debates overhaul of Medicare" by Andrew Taylor:
More fundamentally, why a limited purpose voucher just for health insurance instead of an unspecified use tax credit for people over 65 years old.

By specifying a medical insurance use for the voucher, it acts an health insurance subsidy and increases the cost of elderly health insurance while minimizing industry competition.

An unspecified use elderly tax credit would force health insurers to more vigorously compete for the elderly consumers' dollars on price and quality among all consumer consumption choices. It would broaden competition for the dollars, which would force greater efficiencies in the medical sector and allow the medical sector to shrink as a percentage of US GDP.


  1. What about an employee health insurance? When it comes to health insurance for corporate customers, prices really are more competitive as we'd all like them to be, which is why insurance comparison websites are now available online.

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