Medicare vouchers are part of Ryan’s health reform proposals. But replacing traditional Medicare with vouchers for private plans would divide the market by beneficiaries’ income and health status, undermine Medicare’s market power to limit provider payments, and shift costs and risk to participants, according to a study by the Urban Institute. In theory, seniors using vouchers to purchase private or public insurance will harness the power of the marketplace to temper Medicare’s rising bill. In practice, seniors can already enroll in private Medicare Advantage plans, which compete directly with Medicare for participants. But, private Medicare Advantage plans cost less than traditional Medicare in only 15% of the nation’s counties.
The law would not affect employer premium spending per-person insured at about $3,600. But spending would decline for small employers. The 2.7% increase in people covered by employer plans comes at a cost to employers equal to 0.0003% of total national wages. The study’s estimates do not include the potential effects of cost containment initiatives in the ACA or strategies available to employers to reduce their costs by modifying their contributions or benefits. For more information, visit http://www.urban.org.
