The Agenda

‘Vouchers’ vs. ‘Premium Support’

I’m either the most gullible person on the web or I’m the only person willing to make an assumption of good faith about my interlocutors — or I’m both. There’s been a minor dispute about whether to refer to Rep. Ryan’s approach to Medicare as “voucherization” or “premium support.” David Wessel writes:

On health spending, Mr. Ryan wages semantic warfare over whether “voucher” or “premium support” describes his Medicare plan, a distinction that smacks of focus-group testing. By any label, this is a big deal. 

It’s very simple. When we talk about vouchers, we tend to think of school vouchers. And as a general rule, most school voucher proposals don’t allow parents to top up the amount of the voucher. That is, if the voucher is worth $5,000, parents are not generally allowed to add on another $5,000 to pay a $10,000 tuition bill. Why? The basic idea is that many voucher advocates want to avoid the perception, and the reality, of vouchers becoming a subsidy for parents who would have chosen private schools regardless. 

Under premium support, in contrast, topping up is the point. Healthy, affluent seniors will be expected to top up Medicare to pay their premiums, as will other seniors who choose more comprehensive or otherwise more expensive coverage. 

Some years ago, Robert Reich proposed a system of “progressive vouchers,” an idea not unlike the Liberal Democrats’ call for a “pupil premium” in the UK. The basic idea is that poorer students and students with special needs would receive a larger voucher while affluent students would receive a small voucher which would have to be topped up, an idea with a family resemblance to premium support. Regardless, one can see why it is useful to keep “vouchers” and “premium support” conceptually distinct. Laurence Kotlikoff, for example, has called for a health safety net built around vouchers that can’t be topped up.

I’m just trying to help, people.


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