Kaiser Health News, September 2, 2010
By: James C. Capretta

Here's a puzzle: Critics say Medicare Advantage plans -- the private insurance options offered to beneficiaries -- are inefficient and costly. But those same critics oppose vouchers for Medicare -- even though that would set up a direct competition between the private plans and the traditional fee-for-service program.

What are they afraid of?

After all, if the case critics (see Austin Frakt's August 19 KHN column) make is correct and private insurers simply can’t do the hard work of cost control as well as the government, then Medicare's "public option" would presumably win this contest.

But that's apparently not how these critics see things. They are just as resistant to subjecting Medicare fee-for-service to a level playing field of competition as they are enthusiastic about cutting Medicare Advantage's administratively determined payments.

Indeed, when the bipartisan leadership of the Medicare Commission in the late 1990's recommended a move toward a voucher-like program, would-be defenders of government-administered, fee-for-service Medicare viewed it as a mortal threat ("privatization!"). They took this position even though the fee-for-service plan would have been preserved as one of the options for beneficiary selection. In the end, the Clinton administration killed the idea to avoid offending the defenders of the fee-for-service status quo.

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