September 3, 2009

A Non-Partisan Health Reform Plan

This is not a bad plan. It would appeal across the political spectrum, if given publicity:

The plan, known as the Healthy Americans Act, would:

* guarantee private health care coverage for all Americans and allow them to choose the health insurance that is right for them;
* provide health benefits equal to those that Members of Congress now enjoy;
* modernize the employer-employee relationship regarding health care benefits making health care portable from job to job and even allow Americans to keep it between jobs;
* provide incentives for individuals and insurers to focus on prevention, wellness and disease management rewarding Americans for maintaining healthy lifestyles;
* establish tough cost containment measures that save $1.48 trillion over 10 years;
* as demonstrated by the Congressional Budget Office, the plan would pay for itself once the act is up and running by eliminating administrative costs and changing the outdated tax code that gives businesses write-offs for even the most lavish designer health plans; and
* return surpluses to the government after the first two years of implementation.

The Healthy Americans Act modernizes the employer-employee relationship... putting the worker in the driver's seat. Employers can continue to provide exclusive health insurance to their employees and employees who are happy with their current health benefits can keep them. What's new is that Americans will have options. They will also have guaranteed, portable health insurance they can keep as they move from job to job. Under the Healthy Americans Act, even if an individual is laid off, leaves their job voluntarily, or develops a serious illness, he or she would continue have affordable, high quality health insurance just as good as what members of Congress have.

The Healthy Americans Act will make quality health care affordable for individuals families and employers.
All employers, along with individuals and the government, will share the responsibility of financing health care. Employers who provide employee health benefits would be required to convert their workers' health care premiums into higher wages for two years after the bill is enacted.

Employees, in turn, would be required to purchase private health coverage with their higher wages. To ensure that health care coverage is affordable, the plan would fully subsidize the premiums for those who live below the poverty line. Those people earning between 100 percent and 400 percent of the federal poverty line ($10,400 annually per person) would also receive subsidies on a sliding scale to help pay their premiums. The bill also creates a generous standard deduction to help Americans pay for health coverage regardless of whether they get coverage on their own or through their employers.

Employers who don't currently offer health benefits would have to make phased-in "Employer Shared Responsibility Payments," which would be used to provide financial assistance to individuals and families of modest income.

After two years, all employers would make "Employer Shared Responsibility Payments" to the Federal government. These payments are relative to the size of the employer and their revenues.

The Healthy Americans Act will expand Americans' health care choices, while making sign-up hassle-free.
Individuals will choose from a variety of private plans offered in their state, including any employer-based option that may be available to them. Sign-up will be as simple as checking a box on a tax form. Consumers will get help and advice on choosing the best coverage for them from state-based Health Help Agencies (HHAs) and Human Resource departments. They will provide consumers with unbiased information about competing private health plans and determine premium subsidies that will ensure every American can afford their health plan. HHAs will have lower administrative costs by coordinating payments from employers, individuals and the government.

Americans will finally have the information they need to make informed decisions about the best health coverage for them and its cost. They will be able to use their wage increase to shop around for plans that provide just the right level of coverage to match their health and financial needs. Employees who find cheaper policies that work for them will be able to pocket the difference between their salary increase and the cost of the new plan and use that money however they see fit.

The Healthy Americans Act gives every American control over their health care choices and their budgets, with a transition to the new system that will be seamless for many people. Premiums will be paid from a deduction on their paychecks just like many other deductions currently withheld. The only change many people will notice is that they can see how much their health care costs them. And any costs incurred for health care will be balanced out by the raise they get from their employer to pay for it.

The Healthy Americans Act will reform the private insurance market.
Insurance companies will no longer be allowed to "cherry pick" their customers. Under the current system, in most states, insurance companies can pick and choose which customers they sign up. They typically choose the healthy ones and send those in fragile health to government programs more fragile than they are.

Under the Healthy Americans Act, insurance companies will have to enroll every individual who signs up and insurers will be prohibited from raising prices or denying coverage if individuals are sick or are at risk of becoming sick. Previous and existing health problems, occupation, genetic information, gender and age could no longer be used to determine eligibility or the price paid for insurance. Insurance companies will be forced to compete to keep their subscribers healthy.

The Healthy Americans Act focuses on preventive care...

...and provides insurance companies with incentives to keep their subscribers healthy. Individuals would not be charged co-pays for preventive services or chronic disease management. Insurers would be able to offer discounts and other incentives based on participation in wellness programs, like nutrition counseling, tobacco cessation and exercise.

Unlike under the current system where doctors only get paid for treating patients when they are sick, primary care doctors will be reimbursed under the Healthy Americans Act for investing time in chronic disease management and prevention. And with HHAs publishing consumer-oriented information on every plan's success in prevention and disease management, insurance companies would ultimately be competing to keep Americans healthy. Because of strong Federal market reforms, insurance company profits would come from keeping their customers healthy-- instead of making profits by denying claims or limiting coverage only to the healthiest people.

The Healthy Americans Act proves that health reform can be cost-effective.

Currently, health care costs in the United States are growing at an unsustainable rate. In 2006, Americans spent more than $2.2 trillion on health care.

The Congressional Budget Office recently disproved decades of conventional wisdom that said our nation can't afford to fix health care. They conducted an analysis of the Healthy Americans Act along with the Joint Committee on Taxation that showed the Act would pay for itself once it's up and running and would return surpluses after the first two years of implementation.


This plan would address many of the structural problems in American health care, and still allow for the possibility of private insurers finding ways to implement paying-for-outcomes (as explained on this blog), or "accountable" or "cooperative" care or "networks" -- finding ways to spread models like the Mayo Clinic -- instead of the inflationary fee-for-service model that is most commonplace.

A plan such as this one above would require a mechanism to address the situation of a seriously-ill individual trying to change to a plan that has lower out-of-pocket costs -- it must define under what conditions an ill patient can switch plans and what the rules of cost-sharing of would then be between the old and new plans in that situation of ongoing treatment. But designing such rules is only engineering, and not that complicated.


  1. This is an excellent plan. I'd support this. What's the catch??

  2. The Wyden-Bennett plan is seemingly dramatic, before one thinks carefully about it, but Congress tends to go for changes that have a push behind them and require little or no thinking or comprehension.

    With examination, the Wyden-Bennett plan is mostly incremental, and safer than doing little. But it seems dramatic to let everyone buy their insurance with their own dollars explicitly. Congress tends to act only after the ship hits the iceberg.

    The problem is the ship is now hitting the iceberg, slowly, but it's possible on the top decks, if one prefers, to ignore the muted sounds of metal buckling far below.