In preparation for the day when a progressive vision for health reform may have more supporters in the White House and Congress, a number of leading members of Congress have developed new and innovative proposals. These cover the spectrum from small fixes to the Affordable Care Act (ACA) to scrapping the current system and transitioning to a single-payer model. Everyone is trying to answer the same question: How do we get the most people covered in the most affordable way? The Urban Institute might have a good answer.
The Institute released a policy proposal called the Healthy America Program. It finds itself right in the middle of the political spectrum of health reform proposals. The proposal keeps the ACA’s major rules and regulations such as essential health benefits and guaranteed issue and maintains a role for private health plans. But it envisions a much more expanded role for government in order to reach its coverage goals.
The Healthy America Program combines the populations on Medicaid, the Children’s Health Insurance Plan (CHIP), and the individual market into a new single risk pool and market. Individuals in this new combined market would have the ability to choose between a government-run public health insurance plan alongside private health insurance plans. The public Healthy America plan would be a consolidated version of today’s three-part Medicare option, covering inpatient and outpatient hospital services, physician visits, prescription drugs, and other services with a single deductible and out-of-pocket maximum. The new system would also increase premium subsidies by pegging them to Gold-level plans instead of Silver. Further, the proposal includes premium subsidies for consumers, with the amount consumers are expected to contribute adjusted based on income. However, unlike the ACA, consumers with incomes over 400 percent of the federal poverty level (FPL) would have their premium payments capped at 8.5% of household income.
Other components of the Urban Institute’s proposal include:
- Eliminating the employer mandate penalty along with the “firewall” that stops individuals with employer offers of insurance from buying on the new Healthy America market.
- Cost-sharing reductions would be increased, extending deductible and cost-sharing assistance to those earning up to 300 percent of the FPL (up from 250 percent FPL under the ACA).
- Those under 138 percent FPL would not be charged premiums so long as they choose a plan under the benchmark Gold-level plan.
- The tax penalty for uninsured would be pegged to one’s standard deduction, increasing with higher incomes.
- Permanent risk adjustment and reinsurance programs would be instituted to protect against adverse selection and rising costs.
- Low-income individuals receiving benefits through the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) programs would be automatically enrolled in a premium-free public health plan to increase and diversify the risk pool.
- Short-term health plans, association health plans, and other insurance products currently exempt from the ACA’s consumer protections would be prohibited under the proposal, further protecting both the group and non-group markets from adverse selection.
Experts at the Urban Institute estimate the Healthy America Program will insure an additional 15.9 million people, cutting the uninsured rate of legal residents to just 4 percent. The cost of the program is estimated at $65.5 billion, a fraction of the price of a single-payer system. Additionally, overall healthcare spending would fall by $28.9 billion a year due to several cost saving mechanisms within the program. The program could be almost completely paid for by increasing the Medicare Hospital Insurance payroll tax by just 1 percent.
You can read the full proposal and see how it stacks up against other current proposals here.