David Cutler and Health Care

This is basically my 'health care voucher' idea. The only thing I would add is some element that would require limited variation in premiums for insurance companies that accept the vouchers (that way insurance companies can't 'cherry pick' taxpayer money by pricing people who really need coverage out of the market). After all it is the taxpayers money still and they have a right to demand something in return!

Here's an additional feature to promote cost savings:

1. Define a bare bones 'universal coverage' package.

2. Require that everyone purchase at least this 'default package' with their voucher.

3. Any money left over (say the bare bones cost $3000 and you have $3000 left over) will go into a private 'medical account'. A person can then carry over this account year by year and use it to purchase either supplemental medical care directly (say from specialist doctors not covered by the bare bones plan) or 'fancy' insurance policies later on if they wish. When they die money left in their medical account would become part of their estate that they could will to others. Also let them withdraw a portion of their account as cash after a certain time period (say 50% of any dollar older than 5 years).

Benefits:

A. Universal coverage
B. Consumers have a powerful incentive to achieve cost savings. Doing so allows them to build up a nest egg that they can use to purchase care directly or turn into cash.
C. Increased savings by giving people incentives to not spend all of the voucher if they can.

The idea appeals, but with the 'add-on' defect of all Governmemt programs; everyone crowds into an available program. Tapering to $35k makes more sense, though much harder to pass. lgl