There’s a seductive simplicity to it, isn’t there? Skip the messy bureaucracy, forget the government programs, and hand people cash to buy their own health insurance. Personal responsibility! Consumer choice! Market efficiency! It sounds so clean, so American, so obvious.
It’s also spectacularly, dangerously wrong.
I’m tired of watching this zombie idea stumble through policy debates, dressed up in the respectable clothes of economic theory while ignoring every brutal reality of how healthcare actually works in this country. So let me be clear: giving people money to purchase their own health insurance isn’t a solution. It’s abandonment dressed up as empowerment.
The Market Doesn’t Work When You’re Dying
Let’s start with the foundational problem: healthcare is not like buying a car or choosing a restaurant. When you’re clutching your chest in cardiac arrest, you don’t comparison shop. When your child stops breathing, you don’t negotiate prices. When you’re diagnosed with cancer, you don’t have the leverage to walk away from a bad deal.
The entire premise of consumer-driven healthcare rests on the idea that informed shoppers will drive down costs through competition. But healthcare systematically violates every condition necessary for a functioning market. Information is asymmetric—doctors know vastly more than patients. Urgency eliminates choice. Prices are opaque, often unknowable until after treatment. And the product itself—your life, your health—isn’t something you can decline to purchase.
Handing someone a voucher and saying, “Good luck out there,” isn’t creating a market. It’s throwing them into a rigged casino where the house always wins.
The Poverty Tax on Being Sick
Here’s what happens in practice when you give people money for insurance: healthy people buy cheap, bare-bones plans or pocket the cash. Sick people desperately need comprehensive coverage.
Insurers aren’t stupid. They know exactly how to segment this market. They’ll offer attractive low-premium plans that cover almost nothing, capturing the healthy voucher-holders. Meanwhile, anyone with a pre-existing condition, anyone who actually needs healthcare, faces astronomical premiums that no reasonable voucher could cover.
This is the insurance death spiral, and we’ve seen it play out again and again. Individual markets collapse under adverse selection. We watched it happen before the Affordable Care Act. We’re watching it happen in Medicare Advantage. The pattern is clear: without strong regulation and pooled risk, insurance markets cherry-pick the healthy and abandon the sick.
A voucher doesn’t solve this—it just makes it the individual’s problem rather than society’s. Which, let’s be honest, is often the point.
The Inequality Engine
Let’s talk about who actually suffers under a voucher system. Spoiler alert: it’s exactly who you think.
Wealthy people? They’re fine. They already have resources to supplement inadequate vouchers, navigate complex insurance markets, and hire brokers to optimize their coverage. They can afford to pay out of pocket when their voucher-purchased plan inevitably falls short.
But the working poor? Is the family living paycheck to paycheck? They get crushed. They face a bewildering marketplace of jargon-filled plans, make uninformed choices under pressure, and discover too late that their coverage has massive gaps. They skip care because they can’t afford the deductibles. They go bankrupt from medical bills despite “having insurance.”
A voucher system doesn’t create equality of opportunity—it ensures that your healthcare quality correlates precisely with your income, education, and ability to navigate bureaucratic complexity. It’s a system that looks fair on paper while entrenching existing advantages and disadvantages.
The Administrative Nightmare
One of the selling points for vouchers is supposed to be efficiency—cut out the government middleman! But replacing one system with vouchers doesn’t eliminate administration; it explodes it.
Now, instead of one streamlined program, you have millions of individual consumers each navigating separate insurance plans with different networks, formularies, prior authorization requirements, and billing practices. Doctors’ offices spend countless hours verifying coverage, fighting denials, and handling billing across hundreds of other plans.
The United States already spends roughly twice as much on healthcare administration as other developed countries—not despite our fragmented system, but because of it. Vouchers would turbocharge this dysfunction, creating even more complexity, more overhead, more waste.
Every dollar spent on administrative bloat is a dollar not spent on actual healthcare. It’s hard to think of a more efficient way to set money on fire.
The Illusion of Choice
Advocates love to talk about “choice” and “freedom.” But what choice exists when all your options are bad?
If your voucher is inadequate, you have the “choice” of supplementing it with money you don’t have, or accepting insufficient coverage. If you’re sick, you have the “choice” of plans that either exclude your conditions or charge unaffordable premiums. If you live in a rural area, you have the “choice” of one or two insurers that even operate in your region.
This isn’t a choice. This is abandonment with paperwork.
Absolute freedom means freedom from the constant terror of medical bankruptcy. It means freedom from rationing your insulin or skipping necessary surgeries. It means the freedom to change jobs without losing coverage, or to start a business without gambling with your family’s health.
A voucher system offers none of this. It provides only the cold comfort of theoretical market efficiency while people suffer from very real market failures.
We Know What Works
Here’s the thing that makes this debate so infuriating: we don’t need to guess. We have examples. Every other developed nation has figured this out.
They use various systems—single-payer, multi-payer with strong regulation, public options—but they all share standard features: universal coverage, collective risk pooling, price controls, and strong government involvement. And they achieve better health outcomes than the United States while spending far less.
The voucher approach has been tried in bits and pieces, and wherever it appears, it fails. Medicare Advantage—essentially a voucher system within Medicare—costs more than traditional Medicare and delivers worse outcomes. Health Savings Accounts primarily benefit the wealthy. High-deductible plans discourage necessary care.
The evidence is overwhelming. The market fundamentalist approach to healthcare doesn’t work. It has never worked. It will never work because healthcare is not and cannot be a normal market.
The Moral Question
At its core, this isn’t really an economic debate. It’s a moral one.
Is healthcare a human right or a consumer product? Is ensuring your neighbor can see a doctor when they’re sick a collective responsibility, or an individual problem? When we say we believe in the dignity and worth of every person, does that include making sure they can afford chemotherapy?
The voucher approach reveals its answer clearly: you’re on your own. We’ll give you some money—probably not enough—and whatever happens next is your problem. If you make poor choices, get sick at the wrong time, or can’t afford adequate coverage, well, that’s just how markets work.
I reject this. Healthcare is not a privilege to be earned or a commodity to be purchased. It’s a fundamental human need, and in a wealthy society, it should be a guaranteed right.
A Better Path
We don’t need vouchers. We need actual solutions: robust public options, strong insurance regulation, price controls on prescription drugs, and ultimately, movement toward universal coverage that doesn’t depend on employment, income, or navigating a deliberately confusing marketplace.
These systems exist. They work. They’re cheaper and more effective than our current approach. The only thing stopping us is political will and the influence of industries that profit from the current dysfunction.
So the next time someone suggests we solve healthcare by giving people money and setting them loose in the insurance marketplace, ask them: Have you ever actually used health insurance in America? Have you watched someone ration medication because they can’t afford the co-pays? Have you seen medical bankruptcy destroy a family?
The voucher idea isn’t just bad policy; it’s also bad economics. It’s a fundamental misunderstanding of what healthcare is, how insurance works, and what we owe each other as human beings.
We can do better. We must do better. And that starts by rejecting simplistic solutions that abandon our most vulnerable neighbors in the name of market ideology.
