So President Obama has responded to the Ryan/Enthoven voucher proposal with a plan of his own. The President will not dignify the voucher proposal with a serious critique. But he will save Medicare by making deeper cuts to provider payments. In going this route, Obama is proving to be as anti-intellectual as his predecessor in the Oval Office. This is rather alarming considering how much time Obama spent in Hyde Park. Perhaps he hung out at the University of Chicago not for the mental stimulation but because he thought it was a good career move.
Rather than engage in a meaningful debate about the voucher proposal, Obama and others claim that the Ryan/Enthoven plan will increase the financial burden on seniors. If this is the problem, the solution is easy. Make the vouchers bigger and means-test them. One of the beautiful things about the Ryan/Enthoven plan is that it gets the economics right and limits the debate to the simplest of questions: how much should we transfer wealth from taxpayers to seniors? I suppose the real problem is that seniors may not like the answer.
Obama would be hard-pressed to debate the voucher plan on its merits because the very arguments he might muster against it – the potential for adverse selection and the need to assure that everyone uses their vouchers – are the same arguments that have been leveled at his insurance exchange proposal. So the President offers an alternative that is far worse. Anyone who ever used a bathroom at the University of Chicago knows that you can’t get what you refuse to pay for. If the government keeps slashing Medicare payments, doctors and hospitals will either refuse to see Medicare patients, or cut back on the quality of care, or both. I can see seniors lining up at their local CVS for treatment, because no one else will take them.
When Ronald Reagan was elected President in 1980, there was bipartisan support for Alain Enthoven’s vouchers. Nearly half of Congress was prepared to vote for the proposal; all it needed was a push from the White House. But Reagan was opposed to any plan that would require new taxes (to pay for the means-tested vouchers) and did not support the plan. How ironic that a President from the other end of the political spectrum has once again refused to consider Enthoven’s brilliant plan.