This year one out of every six Americans will have no health coverage. For these 46.6 million people, being uninsured is a potential daily tragedy that can mean the difference between good healthcare at the right time or dire illness.
Hospitals are well-aware of this link between coverage and health. As Victor Campbell, chairman of the board of the Federation of American Hospitals, said recently, hospitals are the insurer of last resort for Americans who lack coverage. So, when the uninsured show up in our emergency rooms, they get the care they need, but generally they are sicker because they do not have the coverage to support prevention or early treatment. This means that we have two classes of Americansthose with insurance and those without. This inequity is an indignity for anyone who cant afford health insurance and for their families. It is also a blight on our society.
Full-service hospitals are proud to do their part to support the healthcare safety net, but we cant do it alone. Nearly 47 million uninsured is a staggering number, a symptom of a societal problem that demands a societal solution.
Uniquely positioned as front-line caregivers, the members of the Federation of American Hospitals decided to take the lead and developed a comprehensive proposal to cover all Americans. Our mission: stimulate a national debate by introducing a practical plan that builds on what works and fixes what doesnt.
First, we gathered the most current data. The uninsured fall in all age and income groups, but almost half22.2 millionlive below 200% of the federal poverty level and cannot afford to purchase insurance coverage or sustain it over time. At the same time, more than seven out of 10 come from working families, and 15% of uninsured working families are offered but decline employer coverage. Roughly one out of five qualify for public programs like the State Childrens Health Insurance Program or Medicaid but are not enrolled.
We also wanted to know more about public attitudes toward the uninsured issue, so we commissioned a new survey of voters. A preponderance of respondents identified healthcare as the nations most important domestic issue and the uninsured as the most important health issue for the president and Congress to address. Roughly two-thirds indicated that within the next year, the president and Congress should address the coverage problem. Nearly four out of five said that covering the uninsured would be a key factor in whom theyd vote for in the next presidential election. Additionally, we discovered that most Americans like the healthcare coverage they have.
With these findings in mind, the federation went to work. The result is our plan to cover all Americans, which we call the Health Coverage Passport. The passport is designed to respect the preferences of Americans to keep the coverage they have, which is typically employer-based. It would provide targeted assistance to uninsured Americans, particularly those most in need, and require that states reform the nongroup insurance market to ensure that quality coverage is available for those not covered by employers or public programs. It also would require every American to be responsible for obtaining health coverage.
The proposal would strengthen SCHIP to cover all eligible children. In addition, it would expand Medicaid to include all families and individuals whose incomes are at or below the poverty line. Anyone who is eligible for those programs would be enrolled automatically. It would provide Health Coverage Passports to the uninsured with incomes from 101% to 150% of poverty to fully cover their share of employer-provided coverage, or premiums for individual coverage in state-reformed, nongroup markets if employer coverage is unavailable to them.
For those with incomes from 151% to 400% of poverty, Health Coverage Passports would cover, based on a sliding scale, part of their portion of employer-provided coverage or the cost of individual insurance. And, because all Americans would now be required to have coverage, our proposal would ensure equity by providing a tax deduction for premiums for moderate- and higher-income individuals and families who do not receive the tax exclusion for employer-based coverage.
The size of the federal tab for the Health Coverage Passport program is less than one-third of the cost of the current Medicaid program and would cover almost as many Americans. If implemented fully in 2007, it would require a $115 billion annual increase in federal spending. At the same time, Health Coverage Passport would reduce the cost-shift for uncompensated care by employers and the government and enable the currently uninsured to get preventive care or seek treatment when a health condition is more easily resolved.
Health Coverage Passport also would provide average annual savings of some $300 for every family that already has coverage, as well as $14 billion in savings to states. When these savings are netted out, the overall cost of our proposal is $68 billion for 2007. This is no small amount, but considering that U.S. projected healthcare spending for 2007 is more than $2.3 trillion, $68 billion represents less than a 3% increase in overall annual spendingtrivial compared with what the uninsured and insured would get in return.
Thats our plan. Our short-term goal is modest: jump-start an honest national conversation about healthcare coverage, and prove, with our plan, that you do not have to turn the world upside down to cover all Americans. We urge everyone to join us to implore our policymakers to make it happen.