A national health insurance plan, administered by the federal government as an alternative to private health insurance, will probably be proposed this year by President Obama. Despite the massive cost of a universal health insurance plan, estimated at up to $2 trillion over 10 years, support for the plan is growing in Congress. Obama, and Democratic congressional leaders argue that by reducing health care costs, a universal health insurance plan would actually help reduce the national deficit. Opponents argue that the savings, though real, would have only a minor impact on the deficit.
While the politics and pros and cons of nationalized health care have been debated for years, the national health insurance element of President Obama’s overall health care reform agenda appears to have a good chance of happening. So far, the framework of Obama’s national health insurance plan is best described in Jacob Hacker’s “Health Care for America” plan.
The Goal: Health Insurance for Everyone
As described by Jacob Hacker of the Economic Policy Institute, the national health insurance plan – “Health Care for America” – attempts to provide affordable health insurance to all non-elderly Americans through a combination of a new Medicare-like program provided by the government and existing employer-provided health plans.
Under Health Care for America, every legal resident of the U.S. who is not covered by either Medicare or an employer-provided plan could purchase coverage through Health Care for America. As it currently does for Medicare, the federal government would bargain for lower prices and upgraded care for every Health Care for America enrollee. All Health Care for America enrollees could choose coverage under the affordable Medicare-like plan offering them free choice of medical providers or a selection of more expensive, comprehensive private health insurance plans.
To help pay for the plan, all U.S. employers would be expected to either provide health coverage for their employees equal in quality to Health Care for America or pay a modest payroll-based tax to support Health Care for America and help their employees buy their own coverage. The process would be similar to how employers currently pay an unemployment tax to help fund state unemployment compensation programs.
Self-employed persons could buy coverage under Health Care for America by paying the same payroll-based tax as employers. Persons not in the workplace could buy coverage by paying premiums based on their annual income. In addition, the federal government would offer the states incentives to enroll any remaining uninsured individuals in Health Care for America.
Non-elderly beneficiaries of Medicare and S-CHIP (the State Childrens Health Insurance Program) would be automatically enrolled in the Health Care for America Plan, either through their employers or individually.
In summary, supporters of the Health Care for America plan say it would provide the U.S. with universal health care coverage by:
- being available to any legal U.S. resident without good workplace coverage;
- requiring that employers (and the self-employed) either purchase coverage comparable to Health Care for America for all their workers or pay a relatively modest payroll contribution (6% of payroll) to fund Health Care for America coverage for all their employees; and
- requiring that Americans who remain without insurance either purchase private coverage or buy into the Health Care for America Plan.
For persons already covered by employer-provided health insurance, Health Care for America would virtually eliminate the suddenly very real threat of losing coverage because of layoffs.
What Would the Plan Cover?
According to its supporters, Health Care for America will provide comprehensive coverage. Along with all current Medicare benefits, the plan will cover mental health and maternal and child health. Unlike Medicare, Health Care for America will place limits on total annual out-of-pocket costs paid by enrollees. Drug coverage would be provided directly by Health Care for America, rather than by private health plans. Medicare would be modified to allow it to provide the elderly and disabled with the same direct drug coverage. In addition, preventive and well-child checkups would be provided to all beneficiaries at no out-of-pocket cost.
How Much Will Coverage Cost?
As proposed, the maximum monthly Health Care for America premium would be $70 for an individual, $140 for a couple, $130 for a single-parent family, and $200 for all other families. For those enrolled in the plan at their place of work, anyone whose income was below 200% of the poverty level (about $10,000 for an individual and $20,000 for a family of four ) would pay no additional premiums. The plan would also offer extensive, but so far unspecified, assistance to enrollees to help them afford coverage.
Health Care for America coverage would be continuous and guaranteed. Once enrolled, individuals or families would remain covered unless they become covered by a qualified private insurance plan through their employer.