The version of Medicare proposed by Shepard, Baicker and Skinner would cover fewer services than the current system and introduce cost effectiveness measures that would focus coverage on so-called high value care. It would not cover services that are determined to not return enough health benefit relative to their cost. (This is not the same as expensive versus cheap care. Some expensive care is considered high value, and some cheap care is seen as low value.)

This kind of cost effectiveness system is currently banned in Medicare but serves as the bedrock of public health programs in other countries including the United Kingdom, France, Germany, Canada and others. Like those countries, the authors propose allowing people to “top up” the more basic public insurance with supplemental private insurance that could cover additional treatments and services not covered by the public program.

In theory, the money the government saves by offering a less generous public plan could be used to support other societal interests such as housing, education and food assistance. The authors point to research showing that lower income people often choose to spend less on health care when given the option. They say this is evidence that many low-income people would rather have the government spend less on health care and more on other social safety net services.

While the paper deals strictly with reforming Medicare, the authors note that the same principles could be applied to a universal public insurance plan, similar to those in the countries mentioned above.