A proposal for national health care
Vail CO, Colorado
Colorado is one of a number of states that have or are considering state-sponsored reform of our health care system. The approaches taken vary widely, from universal coverage at one extreme to more focused efforts such as subsidizing child health care. While our politicians in Washington have talked about health care reform for years, very little has been accomplished in terms of meaningful change. Past debates have tended to focus on a Canadian-type system as the alternative to our current fragmented structure. Unfortunately, this has resulted in a perpetual paralysis in our efforts to modify and improve the quality and efficiency of our health-care system. From millions of dollars in health insurance campaign contributions to the many thousands of jobs in the insurance industry that would be lost, proposals that would eliminate the private sector’s role in insuring and providing health care will be opposed by a large majority of Americans.
While I understand the frustration the states feel from decades of federal inaction, I do not believe that potentially 50 separate state health reform mandates and sets of regulation are the answer. The efforts to comply with a morass of different state requirements would certainly increase the administrative costs of health care, not only to the insurance/managed care industry but to the regulatory state agencies charged with oversight of these programs.
What I propose instead is a national, universal, single-payer health care system that provides complete insurability and portability unrelated to employment status, state of residency, health status, age or ability to pay. My proposal would prohibit medical underwriting of individuals but would allow community rating (population-based experience rating) at the state level. Do not confuse single-payer with a Canadian system. They are not synonymous. Case in point is the Federal Employees Health Benefit Program which insures 8 million federal employees. States, counties and municipalities all provide microcosms of this same concept in insuring their public employees and families.
In my proposal, employers would not be charged with selecting the insurer(s) and coverage options offered to their employees, or contributing to their insurance premiums. Coupled with the single-payer concept, this would eliminate the current scenario in which there is a wide variation in employer sponsored plans from none to richly subsidized. It would also curtail the ongoing pattern of reducing benefits and shifting premium costs on to employees. From what I understand, employers would be more than happy to relinquish a role they find increasingly onerous.
Employers by and large do expect to pay towards health care coverage of their employees and families. This can be accomplished through the corporate income tax structure and could be based upon head count, taxable revenue or some combination of factors. The private sector of insurance/managed care would continue in its current capacity of developing benefit plans, premium pricing and provider network contracting.
However, the employer would no longer be the decision maker in deciding which plan to select. The individual family unit becomes the decision maker and selects among a variety of insurers, benefit options, prices and provider networks. The federal government would establish the criteria for insurer/managed care entity participation in the national program as it now does for the Federal Employees Health Benefit Program.
Cost sharing of premium between the federal government and individual family units would be progressive and based upon income, similar to the federal income tax system. We can consider this cost sharing by family unit as additional tax, offset more or less by the elimination of self-paid health plans or the cost sharing with employer sponsored plans. To establish a base or reference point for progressive cost sharing, a base premium cost adjusted by family unit size and perhaps indexed by state would be set annually. State indexing would be beneficial because the cost of health care (driven by unit price and utilization differences), varies from state to state and insurer premiums reflect these differences. As family income rises, the family unit pays increasingly larger percentages of the base annual premium. If the family unit selects a health plan that costs more than the base amount, the family unit also pays the difference between the actual health plan costs and their share of the base plan premium. The reverse of this would also be true, allowing a family to reduce its premium cost share by selecting a health plan that costs less than the base. Those falling below certain income levels (essentially those eligible for Medicaid) would be fully subsidized. The amount of premium cost paid by the family unit could be withheld from employer wages or, with the self-employed or retired, paid with quarterly estimated tax.
A true national plan could eventually replace the existing Medicare, Medicaid and VA health care programs. What would the plan cost? There are an infinite number of answers. First, 47 million uninsured Americans would have coverage and that won’t come cheap. More importantly, with all corporations and individuals contributing to the cost through a progressive taxation concept, the cost will vary according to the aggregate cost profile of the benefit plans selected and the percentage of the cost absorbed by government. What I find particularly appealing in this national plan is that it establishes a direct link between voters and their elected federal officials in appropriately prioritizing universal health care in the federal budget, and that is how it should be. With employers in the middle of health care coverage selection and premium cost sharing decisions, this linkage does not exist today.
Jim Cameron is a retired health care executive who resides in Eagle-Vail. During his 37 year career he served in various managerial capacities with Kaiser Permanente, Gates Corporation, CIGNA, Humana and Quest Diagnostics among others.
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