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DAVIS: A health plan to please liberals and conservatives
Question of the Day
Last week I described the political riddle of a national health care proposal called the Healthy Americans Act (HAA), which mandates universal health care insurance for all Americans, pleasing liberals; which empowers individual choices and private market competition, which pleases conservatives; and which fundamentally restructures our health care system substantially to reduce costs, which pleases liberals and conservatives.
And it is the only plan among all that has breathtakingly broad bipartisan support. Senate co-sponsors range from Democrats Ron Wyden of Oregon and Debbie Stabenow of Michigan to Republicans Bob Bennett of Utah and Lamar Alexander of Tennessee, the No. 3 in the party’s Senate leadership. In the House, co-sponsors range from Democrats Anna G. Eshoo of California, a close ally of House Speaker Nancy Pelosi, and Jim Cooper of Tennessee to Republicans Mike Castle of Delaware and Jo Ann Emerson of Missouri.
This week, as promised, I will explain briefly how this bill works to achieve these goals. And next week I will explain how this act will be paid for - according to the Congressional Budget Office, producing a revenue-neutral result in the first two years and a surplus thereafter. That remarkable conclusion was confirmed in a May 2008 letter signed by CBO Director Peter Orszag, now President Obama’s director of the Office of Management and Budget.
The HAA achieves the liberal goal of 100 percent coverage by requiring all Americans and eligible residents to purchase insurance on a public state-administered exchange. Every such exchange must offer, at a minimum, the same Blue Cross plan available to all federal employees and members of Congress (called the Federal Employees Health Benefits Program, or FEHBP) or its “actuarial equivalent.”
Those workers whose employers provide them with health insurance (estimated by CBO to number about 150 million) would receive an immediate salary increase - probably their biggest ever in a single year. But they would be required to use the extra cash and given the choice of either (a) purchasing an insurance policy among many listed on the exchange, including the FEHBP-type plan, or if they wish, (b) continuing to be covered under their employer’s policy, with the premiums deducted from their paychecks.
Each worker would get a standard deduction each year (or, in the House version, a smaller tax credit), meaning virtually all the extra salary for health insurance would not result in any additional income tax liability. Employers would also get to deduct the cash payments to the workers.
For the rest of the uninsured, the HAA would provide sufficient cash equivalents from the standard tax deduction (and/or tax credit) for them to afford at least the basic plan available on the state public exchange.
And for the poor at the poverty level ($11,000 per year or less), the government would provide a 100 percent subsidy to purchase the same or similar policy. Reduced subsidies would be available on a sliding scale up to 400 percent of the poverty level - i.e., individuals earning up to approximately $43,000 per year and families earning up to $88,000 per year would receive some cash subsidy.
Thus, under the HAA, there would be no need further for Medicaid or the State Children’s Health Insurance Program (SCHIP). Here’s a revolutionary concept for my fellow liberals: Poor people would be treated like everyone else. In other words, the HAA, if enacted, would be the death knell of the current dual system of health care, where those with private insurance too often get better medical care than those poor people under Medicaid or poor children under SCHIP, who are too often rejected by private medicine and forced into public clinics and public hospital emergency rooms.
Now under the HAA, a second goal can be achieved that conservatives should love - the unleashing of the power of the private market and competition to keep private insurers sensitive to premium pricing, benefits and treatment of their customers, rather than a government takeover and mandates.
If under the HAA system private insurance companies don’t sharpen their pencils and chase consumers for business on the state exchanges, they will lose out - or go out of business. And to repeat the base-line concept of the HAA: At a minimum private insurers will be chasing the relatively lower premiums and satisfactory benefits under a Blue Cross FEHBP-type program currently available to all federal employees, from janitors to members of Congress.
For those who demand a “public option,” one hopes they can get past what seems at times like a robotic mantra and do what President Obama has asked them to do - consider supporting a surrogate that achieves the same objective of keeping private insurance companies honest through vigorous competition.
Blue Cross’s FEHBP would arguably perform that function under HAA. Its premiums are affordable, since the base of people in the plan is so large. The Blue Cross FEHBP is regulated, requiring that all will be covered, regardless of pre-existing conditions. And, a little known fact: Most state Blue Cross companies enjoy significant federal tax subsidies, estimated to be over $1 billion, in a special earmark from the federal Treasury.
Affordability, regulation, strict requirements for universal and guaranteed coverage for all who wish to be insured, taxpayer subsidies: Sure seems like it walks, talks, looks like and achieves the competitive benefits of a pure government-run “public option” plan.
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