Dissatisfaction with the financing of U.S. health care is widespread. The system is inefficient, inequitable, and increasingly perceived to be unaffordable. Because only incremental reform is deemed politically feasible, inordinate attention is devoted to treating the institutional symptoms rather than diagnosing systemic problems that require major surgery. As an alternative, we propose a voucher system for universal health care, an efficient, fair, and relatively simple approach that might elicit broad support. We recognize that change is not imminent, but such a proposal can stimulate discussion and provide a readily available model when the political climate becomes hospitable for endorsing meaningful reform.

The key features of the voucher system are the following:

• Universality
• Free Choice of Health Plan
• Freedom to Purchase Additional Services
• Funding by an Earmarked Value-Added Tax
• Reliance on a Private Delivery System
• End of Employer-Based Insurance
• Elimination of Medicaid and Other Means-Tested Programs
• Phasing Out of Medicare
• Administration by a Federal Health Board
• Establishment of an independent Institute for Technology and Outcomes Assessment