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 By Leif Wellington Haase, The Century Foundation,
6/1/2005
U.S. spending on health care has grown from $246 billion in 1980 to
$1.7 trillion today. At the same time, the number of uninsured
Americans has increased by 5 million over the past decade. These
factors, along with concern over the quality of care, have brought the
need for health care reform back into the headlines. A New Deal for
Health offers a plan for these much-needed reforms, one that focuses on
creating large risk pools while still allowing consumer choice and
maintaining high quality care.
Leif Wellington Haase is a program officer and health care fellow
at The Century Foundation. Haase holds degrees from Yale
University and Princeton University. He has served as the staff director
of The Century Foundation Task Force on Medicare Reform and
was the coauthor of its final report, Medicare Tomorrow (2001). He
also is the author of The Basics: Medicare Reform (rev. ed.),
Breathing Easier? Report of The Century Foundation Working
Group on Bioterrorism Preparedness (2005), and articles on prescription
drugs and bioterrorism preparedness.
The Book Official Website
Universal Health Coverage: Coming Sooner Than You Think
This proposal would keep intact the existing relationship between doctors,
insurers, and patients; preserve U.S. leadership in medical innovation; and
allow Americans to see the doctors of their choice. In many respects it resembles
the way Congressmen get their current coverage. How would it be paid for? Mostly
through the same ways in which today's system is financed, and for only a modest
additional cost. Some new spending would be added to improve public health and
to encourage Americans to stay healthy, which will lower medical spending over
time.
As health costs rise, the predicament of both the uninsured and the currently
insured will grow worse. There will be calls either to expand "consumer-directed"
employer plans that transfer much greater risk to workers, or to embrace much
greater federal government control over the financing and delivery of health
care. This sensible and affordable approach for universal coverage, which combines
federal regulation with individual choice, is a much better bet. (From Century Foundation Website)
How the Plan Will Work
The principal elements of the proposal are the following:
- American families will be required to purchase their own health insurance,
and government subsidies will be offered to make insurance coverage affordable
for everyone.
- The existing federal tax subsidy for employer-based insurance under which
employers can deduct the cost of health insurance from their tax base and
employees do not count their benefits as taxable income will be phased out.
The new revenues from eliminating this subsidy will pay for a part of the
financing of this proposal.
- For every American household, the government will make a contribution to
the purchase of a premium for a basic health insurance plan (premium support).
The level of this contribution will be set to allow each household to enroll
in a basic plan at a modest premium or, in some cases, at no additional cost.
Older Americans, the disabled, those with low incomes, and veterans will receive
a larger subsidy that allows them to purchase a midlevel plan.
- The federal government will establish and sponsor three national health
insurance options and will specify a minimum level of benefits that must be
offered at each level of coverage. It will negotiate premiums annually for
each insurance package with national and local health plans.
- Purchasing at least the basic level of coverage will be mandatory for individuals.
Individuals will be able to change plans on an annual basis and will not pay
higher premiums upon entering or switching plans based on preexisting medical
conditions.
- Medicaid will be phased out, along with all other government insurance plans
based on categorical eligibility, such as the Veterans Health Administration.
Medicare will continue to function for current beneficiaries, but it also
will be phased out. Current Medicare beneficiaries will have the option of
joining the new national health program.
- Subject to federal approval, insurers will be allowed to offer different
plan designs, such as restricted physician networks and copayments. At any
level of coverage, insurers may offer a benefit package that exceeds the federally
mandated minimum. They must, however, offer all tiers of insurance coverage
should they choose to offer any one of them. Moreover, they may not pay providers
different amounts for medical procedures based on the patient's level of insurance
coverage.
- An independent government board will be created to evaluate the cost-effectiveness
of medical therapies and procedures, with a focus on assessing new technologies.
- A large new investment in the public health system will be made to encourage
Americans to practice healthier lifestyles. Each of the insurance programs
will require generous coverage of preventive care, including vision and dental
coverage.
- The plan will be paid for through a payroll tax, a dedicated corporate tax,
general revenues, and the revenues from eliminating the employer-based tax
subsidy.
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