The Medicare and Medicaid programs are not serving the needs of their target populations as well as they could. Democrats believe that Medicaid can be improved with more money and stricter federal regulation, and that Medicare can be improved by allowing it to negotiate drug prices. Republicans believe Medicaid can be improved by delegating responsibility to the states and adding work requirements, and that Medicare can be improved by moving more people into Medicare Advantage.
This Article proposes a very different strategy. Instead of tinkering with Medicare and Medicaid, this Article argues for remodeling both programs along the lines of Social Security, the Earned Income Tax Credit, and the Child Tax Credit. These programs do not provide housing, food, or other goods and services that beneficiaries need. They give beneficiaries money and let them decide how to spend it themselves. By using a similar approach for Medicare and Medicaid (i.e., by giving beneficiaries an insurance policy covering catastrophes plus money either in the form of cold hard cash or a restricted spending account), both programs would allow beneficiaries to purchase the goods and services that, in their judgment, will help them most. The remodeled programs would also unleash the bargain-hunting skills of more than 100 million Americans, helping to drive down costs and minimize fraud.

Keep Reading There is a Better Way: Make Medicaid and Medicare More Like Social Security