Why would we make grandma buy private health insurance?
I recently wrote about 401(k) plans and why do-it-yourself retirement is turning into such a disaster for so many people.
The 401(k) "experiment" has shown that the average worker does not have the right tools to make appropriate financial decisions when it comes to retirement.
Unfortunately, there's little evidence that we'll undo the experiment and go back to a pensioned approach to retirement because companies have made too much money by privatizing it.
Turning Medicare into "Vouchercare" is a similar step in the wrong direction.
Instead of being part of a government-run insurance program, seniors would get a check from the government that they would use to buy private health insurance.
Let me tell you, buying health insurance is a nightmarish task best undertaken only after hours of research and a long belt out of a bottle of brown liquor.
The research is to learn about your options; the booze is to steel yourself for confronting the amount of money you'll pay and how little you'll get in return.
I'm fortunate that my boyfriend works for an insurance company and can help me cut through the gobbledygook, fine print, doublespeak, exceptions and loopholes to help me pick the most affordable plan for what I need.
Even so, insurance and health care costs more and covers less every year, and does so not just with price increases but by raising copays and deductibles and by including coinsurance as part of more affordable plans.
(That last one is a nasty thing that requires insured people to pay a percentage of their care after they've passed their deductible. If I were to get seriously ill, I'd be responsible for the first $2,500 — my deductible — and then 10% of all additional costs.)
Not everyone is so fortunate to have a helping hand in choosing the best plan.
We already know that seniors are prone to having difficulty with finances as they age.
According to the Mayo Clinic, 12% to 20% of seniors over the age of 70 have mild cognitive impairment. An additional University of Alabama-Birmingham study found that MCI affects the ability to handle financial transactions and manage money.
That's why grandmom is more likely to fall for that scam than you are.
Do we expect seniors to be able to wade through dense insurance company documents to pick the right plan?
My mother and her siblings handled my grandmother's affairs as she slid further and further into dementia. Who's going to help those who don't have seven children to help manage care?
And any claims that a voucher is about "choice" are ludicrous. I have plenty of insurance choices, and they're all exceedingly expensive.
Nor would a voucher program do anything to stop the rising cost of insurance or medical care.
The free market will not provide a solution as a reaction to the glut of seniors on the market by offering low-price plans — for the simple fact that seniors are expensive to insure.
Instead, a voucher program will shift the burden of insurance and care cost increases onto seniors, many of whom are on fixed incomes already.
Those costs are a big deal.
I just received word that I'll be celebrating my six-month anniversary with Amerihealth New Jersey with a 25% rate increase. That's right. A 25% increase after six months.
And, no, I haven’t been sick.
If Vouchercare happens, seniors would be facing the same kinds of price hikes.
Under the Ryan-Romney plan, voucher subsidies would be tied to the GDP (that’s the country’s gross domestic product, not the rate of inflation) plus 0.5 percentage point.
That's nowhere near enough to meet the cost of health care inflation.
As I said: disaster.
What happens when vouchers aren't enough to provide seniors with appropriate care? Do we let them die? Or will they go in and out of emergency rooms, as the uninsured are sometimes forced to do, never being able to pay bills when they come due. Who picks up the cost of their care?
We have safety nets for a reason. They're supposed to help the less fortunate with basic services so they're not dying in the streets.
Medicare is a big reason that many seniors have health care, and taking that away isn't just wrong, it's cruel and inhumane.