Tuesday, July 10, 2007

Achieving Universal Health Insurance

If I had to come up with the basis of a plan to achieve universal health insurance coverage, here is what it would be:

1) All people under age 65 would be presumed to be enrolled in Medicaid unless they show on their tax return that they have coverage elsewhere. Premiums for Medicaid coverage would start out at zero for those with the lowest incomes and increase with income to some multiple of the poverty level, after which the premium is high enough so that there is no taxpayer subsidy. The premium is collected on the annual tax form. That's universal health insurance as a base.

2) On a state-by-state basis, all people under age 65 would have the opportunity to enroll in the plan that is offered to state employees. It is not clear whether this would increase or decrease per-participant costs in the plan. Higher per-participant costs would have to be made up by the taxpayers. The purpose of this buy-in option is to give middle class workers access to a more generous plan than Medicaid if they pay (most or all of) the additional costs.

3) Those nearing age 65 (say 55 - 64) would be able to buy into Medicare (Parts A, B, and D together). This is reminiscent of the Clinton Administration's plan. However, the premiums would be set so that there is no taxpayer subsidy (not even for Parts B & D).

4) As a matter of law, private insurance contracts would not be permitted to discriminate based on pre-existing conditions.

5) Employers who sponsor a health insurance plan would have to offer the plan to all workers.

6) Premiums paid to all of these options would have the same tax treatment (preferably modified as I have previously discussed).

I think that the virtues of this plan are that it achieves the objective of universal coverage with minimal external funding and without eliminating choice and thus the possiblity that competition could lead to better outcomes for consumers. I expect the private group and individual markets to shrink but not to disappear. It's also a bit simpler than other plans that have been proposed.

No comments: