Center for American Progress’ New Proposal for Universal Coverage
It would cover every American, give them a choice of plans and fill in the holes in the current state and federal and private insurance plans. It's a coherent vision for the future evolution of our health system. The Center for American Progress calls it Medicare Extra.
Medicare Extra would be available to every American regardless of income, health status or age. It would integrate Medicaid into Medicare Extra and give employers and employees the option to choose the program by buying in.
Medicare would be fixed as follows: out of pocket limit, coverage of dental care and hearing aids and an integrated drug benefit. The federal government would negotiate drug prices with the pharmaceutical industry. Seniors and the disabled could choose Medicare Extra or keep their existing coverage. So could individuals with TriCare, FEHP, VA, Medicare Advantage or employment based coverage. All individuals with no other coverage are automatically enrolled. Their premium contributions are collected through the tax system.
The benefits would be the ten essential health benefits of the Affordable Care Act with the addition of dental and vision and hearing aids for adults.
Premiums would be zero for those with incomes under 150% of the federal poverty level, with a sliding fee scale above that for individuals with incomes from 150 to 500% of FPL, beginning at 0 and increasing to 10% of income. Premiums for those over 500% of FPL are capped at 10% of income.
The actuarial value of the covered benefits would vary by income, beginning at 100% for those with incomes of less than 150% of FPL declining to 80% (20% copays) at 500% of FPL. No copays for prevention, generic drugs or treatments for chronic disease would be permitted. Copays would be reduced for those choosing centers of excellence for their treatments.
There would be freedom of choice of providers, including all who currently participate in Medicare.
Long term care benefits would continue as currently; however asset limits and waiting periods for coverage would be eliminated. I did not understand the rest of the proposal other than that further details on long term care would be forthcoming.
Medicare Advantage (retitled Medicare Choice) would be competitively bid. Individuals selecting the less expensive plans would get the savings and those choosing the more costly plans would pay the incremental difference.
Employers would have four choices: 1) buy for their entire workforce and pay 70% of the premium for a plan offering an 80% actuarial value; 2) buy Medicare Extra for their workforce pay 70% of the premium, employees pay their share with income adjusted premiums; 3) employee(s) choose Medicare Extra; employers pay their share of the prior year’s medical expenses adjusted by the medical CPI and the growth or decline in the numbers of their employees; and 4) employers pay a percentage of payroll ranging from 0 to 8% depending on the size of their workforce. Small employers (100 or fewer) may choose to offer no coverage, ACA compliant coverage or Medicare Extra. The pre-tax advantages associated with employment-based coverage are only available for employers and employees in Option 1 to avoid double subsidies.
Medicaid and CHIP would be integrated into Medicare Extra and states would pay a maintenance of effort amount based on what they currently spend on Medicaid. This would be adjusted in the future by the growth in GDP per capita plus 0.7%.
Phase in would be as follows. Year 1, the Medicare option is available in any county where there is no plan being offered through the Exchanges. Year 2, the Medicare option is available in all counties through the Exchanges. Year 4, auto enrollment in Medicare Extra for the uninsured, new born, those turning 65 and those in the individual market. Small employers may participate. Year 6, Medicaid and CHIP auto-enrolled in Medicare Extra. Year 8, large employers may enroll in Medicare Extra and pre-tax purchasing advantages for high wage employees are phased down.
Reimbursement rates would be changed as follows: primary care physician rates would be increased by 20% and specialty physician rates reduced a budget neutral amount. Hospital reimbursements would be an average adjusted blend of commercial, Medicare and Medicaid. Medicare Extra would negotiate rates for prescription drugs, durable medical equipment and medical devices. Medicare Extra would pay hospitals based on bundled rates, including 90 days of follow up care. Medicare Extra would pay for services on a site neutral basis – i.e. the same reimbursement for the same services whether in the doctor’s office or the hospital.
Administrative efficiency would include only one set of quality measures and one set of clinical credentials to be used by all public and private payers. Electronic medical records that automatically convert to claims billing would be used by all payers and providers.
Financing includes a roll back of some of the tax breaks for the wealthy in the Trump tax cuts, a surtax on the very wealthy, and changes in the ability to pass on wealth to heirs tax free. The tax advantages of pre-tax purchasing health coverage through employment would be capped at 28%. Excise taxes on tobacco and sugary soft drinks would also be a part of the finance package. The financing is built on the existing federal, state and private structures of Medicare, Medicaid, employer, employee and individual contributions. It appears as if small businesses, employers and employees would pay somewhat less for substantially better coverage. The costs of private employment-based coverage would decline by linking provider reimbursements to a blended rate that would be substantially less than commercial coverage.
Prepared by: Lucien Wulsin