National Journal’s Margot Sanger-Katz picked up a juicy Washington tidbit worth passing on to healthcare reporters and interested readers. The GOP has designed brand new language that pretties up the notion of Medicare vouchers.
Recall that vouchers were at the heart of the plan that Paul Ryan, the Wisconsin representative, pushed when he ran as Mitt Romney’s VP. Under his program (and others like it), seniors and people with disabilities would get a sum of money from the government to buy health insurance in the private market. If the money was enough, great! If not, they’d have to pay the rest out-of-pocket. It’s a big cost shift from the government to elderly and disabled people, especially to the sickest and poorest among them.
Some brief history of vouchers, and how we describe them, is in order: Since economists Henry Aaron and Robert Reischauer called for voucherizing Medicare back in the mid-1990s, the concept has been painted with a lot of lipstick. Aaron and Reischauer dubbed it “premium support.” After all, the government would be giving Medicare beneficiaries money “support” to pay for a “premium.” But lipstick on a pig doesn’t do away with the pig. And a voucher plan by another name is still a voucher plan.
“Premium support” seemed less harsh than “voucher” and conveyed a veneer of objectivity. The wonk and foundation community liked the term. Sometimes those folks used the term “defined contribution.” That was really wonky, and most Americans had no clue what it meant. It was a term borrowed from the pension world, where Americans once had good “defined benefit” plans, in which benefits were determined by a formula based on age and years of service on the job. Those have been replaced by the less good “defined contribution” plans, like 401(k)s, in which employer contributions are optional, and workers’ own contributions determine the benefit they eventually get. “Defined contribution” in the context of Medicare means the size of the contribution the government makes determines how good the coverage will be.
In the late 1990s and afterwards, voucher supporters, notably conservatives and Republicans, used the term “Medicare privatization.” The term meant that private insurers would have a larger role in providing Medicare benefits, on the theory they could provide benefits cheaper than the government. That has not necessarily been the case. Currently, private insurers provide the prescription drug benefit for all beneficiaries, and they also provide all Medicare benefits for million or so Americans who have chosen Medicare Advantage plans. For the rest of Medicare recipients, the government still provides the benefits.
The idea of privatizing Medicare has not resonated with large segments of the public. Republicans—who mostly supported the concept—believe it is time for new language, as the National Journal reported. Testing showed that people think of the word “premium” as something high end, like a car, not insurance, and certainly not something low end like paying more for their healthcare. Sanger-Katz reports that the testing showed that the public likes the words “choice” and “competition.” Sounds a little like Frank Luntz, doesn’t it? So Republicans have banished “premium support” from their talking points in favor of the new term, “competitive bidding.”
Proposals floating around Congress these days call for privatizing Medicare via vouchers, but they don’t use the term. In general, the proposals would encourage insurance companies to bid against each other, to produce the lowest-cost policies in the private market. Customers would receive a sum of money—aka a voucher— to help defray the cost. Tennessee Sen. Bob Corker introduced his “Dollar for Dollar Act,” and a good chunk of it deals with what he calls structurally transforming Medicare by “keeping fee-for-service Medicare in place, competing side-by-side with private options that seniors can choose instead. Utah Sen. Orin Hatch used the term “competitive bidding” and said allowing health plans “to compete with traditional fee-for-service Medicare” would reduce costs and preserve the quality of care. The plans would allow people to choose between these voucherized plans and traditional Medicare, preserving the notion of choice.
The press may be starting to pick up this new way of talking about vouchers, framed around competition and choice, and passing it on. The Knoxville News Sentinel reported in December, for example, when Corker introduced his bill, that “its details include reforming Medicare to include competition from private health-care options” without offering details of its own what that would mean. That’s journalistically weak. Who would be hurt or helped? No clue.
Vouchers are the vehicle for essentially changing Medicare from social insurance to private insurance. That may be the game plan. James Capretta, a senior fellow at the conservative Ethics and Public Policy Center, argued to Sanger-Katz that both parties will eventually embrace the concept—whatever it’s called.