Health reform is back on the agenda, and not a moment too soon. U.S. health financing is a costly mess that is putting more and more Americans and their employers at risk. Yet nothing guarantees that the burgeoning debate over healthcare will end differently from past debates. The U.S. has witnessed epic healthcare battles roughly once every 15 years—most recently the Clinton plan of the early 1990s. Yet with the exception of the passage of Medicare and Medicaid in 1965, each of these struggles has ended in political gridlock.
The stakes are too high to allow gridlock again.
Now is the time, therefore, for advocates of change to map out their ideas and strategies. The central goal should be simple and ambitious: health security for all. The means should be straightforward, too. Rather than coming up with complex “compromise” schemes that try to please everyone (a la the Clinton plan) or seeking to turn the entire system upside down overnight, reformers should instead aim to build on the best and most popular elements of the present structure through a series of politically realistic changes that are straightforward to explain and implement.
I have recently developed a proposal that embodies this strategy, Health Care for America. The proposal would extend insurance to all nonelderly Americans through a new Medicare-like program and workplace health insurance, while creating an effective framework for controlling medical costs and improving health outcomes.
What the proposal would do is simple: Every legal U.S. resident lacking access to Medicare or good workplace coverage would be able to buy into the Health Care for America Plan, a new public insurance pool modeled after Medicare. This new program would team up with Medicare to bargain for lower prices and upgrade the quality of care so that every enrollee would have access to either an affordable Medicare-like plan with free choice of providers or to a selection of comprehensive private plans.
At the same time, employers would be asked to either provide coverage as good as this new program or make a relatively modest payroll-based contribution to the Health Care for America Plan (6% of payroll) to help finance coverage for their workers. At a stroke, then, every American with a direct or family tie to the workforce—a group that includes more than 80% of the uninsured and more than 90% of all non-elderly Americans—would be automatically covered by private insurance or the Health Care for America Plan. (The self-employed could buy into the plan by paying the same payroll-based contribution; those without workplace ties would be able to buy in by paying an income-related premium; and any remaining uninsured would be enrolled when they sought anti-poverty or unemployment benefits, or obtained care without insurance.)
Equally important is what Health Care for America would not do. It would not eliminate employment-based insurance or allow employers to retreat from paying a reasonable share of health costs. It would not leave Americans coping with escalating premiums with an inadequate “voucher” for private coverage, or pressure them to enroll in tightly managed HMOs. And it would not break up the large insurance groups in the public and private sectors that are best capable of pooling risks today. Instead, Health Care for America would preserve what works and replace what does not—through a simple yet comprehensive strategy that holds out the best promise of controlling costs, improving quality and guaranteeing health security.
Health Care for America is not single payer—a vision that for both political and budgetary reasons is unlikely to be achieved in the near future. Yet, like single-payer proposals, it would create a large publicly overseen insurance pool that would spread risks broadly, bargain for lower prices, capitalize on the vast administrative efficiencies of a single insurer, and use its reach and purchasing power to spearhead improvements in the quality and cost-effectiveness of care.
Health Care for America also rests on the conviction that the Medicare model has a proven track record—and much untapped potential—when it comes to controlling costs and improving care. Sustaining Medicare’s vital promise to the aged and disabled does not require abandoning the Medicare model. It requires extending the model to those without secure workplace coverage, allowing the two programs to work jointly to hold down costs and improve the quality of care.
Health Care for America would be good not just for American families, but also for American corporations. It would make it easier for firms to provide coverage on their own by reducing the burden of uncompensated care and the cost to employers of covering workers’ employed dependents (because all employers would be required to contribute to the cost of covering their own workers). It would also offer substantial savings to employers now burdened by high premiums. Employers that chose to enroll their workers in Health Care for America would be free to supplement the program’s comprehensive benefits, allowing them to provide better coverage at a lower cost.
If one word captures the essence of Health Care for America, it is “guaranteed.” Health Care for America would guarantee coverage; it would guarantee a generous package of benefits; it would guarantee greater choice; and it would guarantee real savings and improved quality. To fulfill these guarantees, Health Care for America would create a new public-private partnership with powerful built-in incentives to control costs while improving quality. The stakeholders in our crumbling system would forge a new and stronger social contract for the 21st century.
