by Julie Rovner
February 16, 2011
Former House Majority Leader Dick Armey's FreedomWorks group says vouchers should replace the current Medicare and Medicaid programs.
Let's suppose for a minute that Republicans succeed with the repeal part of their professed "repeal and replace" strategy for the huge federal health care law. What would the replacement look like?
Well, the folks at FreedomWorks have a few ideas. If that name doesn't ring a bell, the group is led by former House GOP Majority Leader Dick Armey, and is an organizational backer of the Tea Party movement.
In a memo obtained by NPR, the organization proposes a sweeping health agenda that includes turning Medicare and Medicaid into vouchers that beneficiaries can use to buy good private health coverage."
Care for a peek? You can read the memo by clicking here.
The bottom line, as the memo makes clear, is to turn the major health entitlement programs from defined benefits (where coverage is ironclad) to defined contributions (where only a certain amount of funding and coverage are guaranteed). Individuals would be at risk for rising costs and cuts in coverage. The goal, as the memo explains, is "to save our government from bankruptcy."
Beyond helping the government's bottom line, the approach, conservatives have long argued, would give more freedom of choice to patients. Also, doctors and hospitals, as the memo states, would have "a right to be paid for their services, at market rates."
OK, so what if patients can't afford those market rates, even with the vouchers? The memo has got that covered:
In a free society, the moral way to help those who are less fortunate is through private charity — or failing that, through targeted subsidies — not mandates and regulations.
Along those lines, the plan also calls for ending Medicare price controls and what it refers to as "rationing," by allowing hospitals and doctors to charge more than Medicare pays, with patients being required to pay the difference.
Currently, doctors who want to charge above Medicare rates must leave the program.
Prices could be ultimately be lowered, the memo argues, by more price transparency and by allowing people to purchase health insurance across state lines, which would "end the anti-competitive monopoly currently held by state insurance regulators."
And of course, with more people spending more of their own money on health care, they will be more careful purchasers. "The main cause of excessive medical inflation (which is itself the main cause of people being uninsured) is the fact that most Americans are over-insured," says the memo.
Say what? A quick look at the latest figures from the Census Bureau shows that more than 50 million people in this country don't have health insurance. And even people who get insurance on the job are paying a higher share of the expense.
Finally, the memo urges the GOP not to focus on how many more people would be covered by health insurance. "That criterion puts us in a policy box that leads to more coercion," it says.
Indeed, it might be better politically not to mention that. The House GOP proposal offered in 2009 that included many of the proposals included in the FreedomWorks memo, according to the Congressional Budget Office, would have reduced the number of uninsured Americans by about 3 million people, compared with the 32 million that are estimated to gain insurance under the health law as passed.