Tuesday, February 02, 2010

Which would be the more effective incentive for increasing the efficiency of the provision of medical care for elderly Americans over, say, the years 2020-2030?
  1. Old folks can't afford inefficient care. Specifically, retired people are given vouchers (in lieu of traditional Medicare), but the vouchers don't grow as fast as the average cost of health care.
  2. The government can't afford to give old folks inefficient care. Specifically, Medicare is not voucherized, and Medicare costs finally reach the limit of what federal taxpayers and bondholders are willing to bear.
I think Ezra Klein is implicitly betting on (2), and at best thinks Paul Ryan a fool to bet on (1). (I'd bet on (1) too.)

Even if Klein is right that most Americans will never find a better deal than Medicare, I doubt he would assert that no one will ever have unusual circumstances in which they would be better served by a private option. (One plausible scenario is wanting to fly to a foreign country and there purchase an unproven, experimental, potentially life-saving treatment that Medicare refuses to pay for.)

Therefore, I demand the option to exchange my Medicare benefits for their actuarially fair value as an annuity.


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