Opinion: A Dutch model for Medicare

The debate over Rep. Paul Ryan’s proposed changes for Medicare -- replacing guaranteed payment for services with a voucher for most of the cost of purchasing private insurance -- is generating a lot of heat. The Dutch might be able to shed a little light. In 2006, the Netherlands shifted its entire population -- elderly and sick as well as young and healthy -- to a premium-support-based arrangement. The complex, multi-payment approach had three basic elements. The first -- to ensure equity -- involved attaching a risk-adjusted payment to each individual, paid by a national social insurance pool, ensuring that the size of each person’s voucher would make him or her attractive to private insurers. The second -- to ensure competition on price and quality -- was to allow people to band together in “collectives” (interest- or Internet-based) to negotiate with insurers over price and extra services (core benefits were fixed by law). The third element -- to ensure that private insurers served the public interest -- was heavy regulation of insurers, including requirements that they take all applicants, even at the door of the hospital emergency room.