By Leah S. Poniatowski, J.D.
The Urban Institute’s Healthy America program proposal presents another strategy to help resolve health care coverage issues persisting after the implementation and amendments to the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The Institute’s "practical proposal" reflects its goals "to keep what people like, change what is not working, and limit the increase in new federal costs."
New market and incentives. Healthy America would not change existing employer-sponsored plans, Medicare, or other federal programs like TRICARE or the Indian Health Service. It proposes replacing the non-group insurance market and the Medicaid/Children’s Health Insurance Program (CHIP) acute care for the non-elderly with a government-administered public health insurance plan similar to Medicare in conjunction with private coverage similar to Medicare Advantage. Legally present US residents would be eligible for these programs, including those with disabilities who are ineligible for Medicare, and there would be no requirement for enrollment. With respect to employer-sponsored coverage, the ACA penalties against employers not offering coverage would be removed along with the "firewall" keeping employees from receiving financial assistance when they have offers of insurance. In light of the repeal of the tax penalty for uninsured individuals, the plan proposes to reduce a portion of an individual’s standard deduction if they remain uninsured.
Premiums and financing. Under Healthy America, plan premiums would be in line with an individual’s income, and federal subsidies would reflect a public plan benchmark value: 80 percent actuarial value (AV). These premiums would be the largest source of funding for the program; the remaining amounts would come from repurposed Medicaid financing, other subsidies, and additional revenue sources (e.g., increases in payroll, income, or sin taxes). The Institute envisions the plan would help control program costs by allowing plan competition, provider payment rate caps, and negotiated prescription drug prices in addition to utilizing payment and delivery system reforms from Medicare.
Other proposals and challenges. The Institute provided comparison of its plan to five others—Medicare X, the Consumer Health Insurance Protection Act, Medicare Part E, Medicare Extra, and Medicare for All. Similar to Health America, these other plans largely borrow from the Medicare program. The Institute also acknowledged that further thought was needed on the role states would play and a possible cap on employer coverage tax exclusion.
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