Turn Health Insurance Subsidies into Health Insurance Vouchers

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Some ideas do not require a lot of text:

President Trump is cutting the ACA cost-sharing subsidies -- estimated to total $7 billion in 2017, $10 billion next year, and $16 billion by 2027 -- which have been doled out monthly to health insurers to reduce out-of-pocket costs for low income people. Democrats in Congress are adamantly urging the administration to continue making the payments. Instead, they should call for rerouting these billions to a health insurance voucher program, offering the same total amount to the same low income insurance buyers. (Of course, these vouchers could be used only to purchase health insurance.)

The main advantage of this approach is that 100% of the funds will serve low income people; under current arrangements, a significant part of the subsidies benefits the health insurance shareholders, not the customers. These vouchers would also increase competition among health insurers because people would be free to choose to which insurer they will grant their vouchers.

There are a lot of precedents for this approach—in food stamps, housing vouchers, and credit for energy. Finally such an approach would stress that Democrats are not out to subsidize big corporations but those in need. Work on Main Street rather than Wall or K Street.

Amitai Etzioni is a University Professor and Professor of International Relations at The George Washington University.

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