Rep. Ryan’s proposal that Medicare be replaced with a voucher system for elders to buy private insurance sends shudders down my spine, for the very reason that we’ve been talking about this week at Money Health Central: financial literacy.
Ryan’s has a lovely idea that elders will be informed and prudent shoppers for medical insurance; it just doesn’t square with my experience with the public in general and with the elderly in specific. How is it that those who are increasingly sick, frail, undereducated, or simply tired going to manage this? How have patients become consumers?
What will be the fate of those who are not financial literate, much less savvy? Even those sharp as tacks in their prime will fade with age: who sees that the system works for them?
Then imagine how the elderly are going to deal with the record keeping and the coverage hassles that seem to be endemic in private insurance programs. It’s a given that the profit motive on the insurers part will push them to limit service. How are the elderly going to navigate the insurance quagmire?
My doubts are not confined to this Medicare proposal. I find that the model of the informed consumer toe to toe with the titans of commerce is only partially grounded in economic realities. Look at the mortgage mess where people were sold utterly unsuitable loans with provisions they didn’t understand and couldn’t perform.
It seems those selling to consumers are always ahead of the buyers in understanding.
Are we going to make financial literacy a life or death proposition?
Image courtesy of vicci