HA: In urban areas, private plans cost twenty percent more than traditional Medicare and six percent more in rural areas. To date, private plans have not lowered costs.

TL: But we have a lot of competition in that market, right?

HA: There’s plenty of competition in the Medicare program. As I’ve said, most Medicare enrollees can choose among many competing private plans. If you think that competition will do the trick, it hasn’t done so yet. It could be that current Medicare rules discourage plans from competing on price and that private plans might lower prices under a different set of rules. But traditional Medicare has a big advantage. It has so many enrollees that it can dictate prices the way no insurance plan can. And it doesn’t have selling costs or need to generate a profit so that it can pay dividends to private stockholders.

TL: Are there any other reasons you have changed your mind about the wisdom of vouchers?

HA: The political climate has changed. In the mid-1990s, it was a different world in health policy. The Clinton health plan had just gone down and general health care spending was rising faster than Medicare spending. It seemed like vouchers might go somewhere. They were a chance to reform one part of the system. Today everything is different. Medicare spending is growing significantly less rapidly than private spending, in part because Medicare can set hard limits on how much it will pay for certain services and private plans in general cannot do that.

But the biggest change is the Affordable Care Act, which has created an enormous agenda for the health policy community, and which promises to generate information that will help the nation decide whether something like premium support is a good idea.

TL: What sort of information?

HA: The key to the success of premium support is the effective regulation of insurance offerings in a way that allows some very vulnerable people to choose intelligently among competing plans and the efficient provision of subsidies. The Affordable Care Act is setting up health insurance exchanges to just that for roughly twenty-nine million people. The population to be served under the Affordable Care Act is much easier to deal with than the Medicare population. It is less frail and it is much smaller than the fifty million who are now in Medicare. Yet states are having real problems fielding the exchanges, and we don’t know how we are going to get them up and running by 2014. It’s close to wacky to repeal the exchanges called for by the Affordable Care Act, which will serve twenty-nine million comparatively healthy people, and then in the next breath propose to create something like them for close to fifty million people who are much sicker and frailer.

TL: What are some of the other factors that are bringing vouchers back to the national agenda?

HA: Everyone has been persuaded that the nation faces a long-term deficit problem. Making sure Medicare spending doesn’t rise too much is being pushed by people who care more about the deficit than protecting access to health care by vulnerable populations.

TL: Does Medicare have a cost problem?

HA: Absolutely. The number of Medicare enrollees is going up and is projected to rise faster than incomes.

TL: Don’t official projections show a slowdown?

HA: Yes, they do. Official projections assume continuation of the limits enacted several years ago on payments to physicians. But Congress is not likely to stick to those limits. One force slowing down spending is real but temporary. As baby boomers retire, the age of the Medicare population is falling, and that holds down costs per person. Of course, those baby boomers will grow older, and as they do the per beneficiary costs will rise.

TL: So then Medicare does have a cost problem over the long haul. Is the Hospital Trust Fund, which pays seniors’ hospital bills, adequately funded?

Trudy Lieberman is a fellow at the Center for Advancing Health and a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR’s healthcare desk, which is part of our United States Project on the coverage of politics and policy. Follow her on Twitter @Trudy_Lieberman.