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Achieving affordable coverage for all in seven years

From the May ACP-ASIM Observer, copyright © 2002 by the American College of Physicians-American Society of Internal Medicine.

By Robert B. Doherty

The conventional thinking in Washington says that legislators won't do anything in the near future that will make a big impact on the problem of the uninsured. Partisan divisions, budget problems, voter disinterest and the upcoming elections are all cited as reasons why Congress won't act. The 107th Congress couldn't even agree to include in its economic stimulus plan a modest tax credit to help low-income people buy health insurance. Meanwhile, recent estimates say that the number of uninsured Americans has gradually increased to more than 40 million over the past year.

When trying to achieve universal coverage, we have two options: We can resign ourselves to pursuing only modest, achievable goals, or we can challenge the conventional wisdom by offering new ideas that make universal coverage possible.

ACP-ASIM has chosen the latter approach. At its April meeting, the Board of Regents approved a comprehensive new plan to give all Americans access to affordable health insurance by the end of the decade. (The full text of the plan is online at www.acponline.org/hpp/afford_7years.pdf.)

The plan shows why it is imperative that Congress act. To make its case, the College cites its own groundbreaking research on the health consequences of being uninsured. (See "No Health Insurance? It's Enough to Make You Sick.")

Our new plan goes beyond the usual pleas for politicians to take action. We instead provide a specific, viable and achievable road map to reach universal access to affordable health insurance for all Americans by 2009.

Our proposals

The College's seven-year plan builds upon existing sources of health insurance coverage such as Medicaid, the State Children's Health Insurance Program (S-CHIP) and private health insurance. But unlike the current fragmented system, the ACP-ASIM plan would weave these sources of care into a fabric that would cover everyone. We propose doing this by expanding the programs while dramatically changing their financing, eligibility and administration so they enroll uninsured Americans more effectively.

Medicaid would be expanded to cover all Americans with incomes up to 100% of the federal poverty level. Unlike the current system, in which each state uses its own criteria to determine Medicaid eligibility, the federal government would determine eligibility standards and bear the full costs of enrolling the newly eligible.

For individuals with incomes between 100% and 200% of the federal poverty level, the federal government would provide a direct subsidy that could be used to buy coverage through an S-CHIP plan or from private insurers. ACP-ASIM's plan emphasizes the importance of ensuring that the premium subsidy is generous enough to make coverage truly affordable for such individuals.

As a result, we state that the subsidy must cover about 90% of the premium cost of purchasing coverage. The paper suggests providing the subsidy in the form of a refundable tax credit or voucher.

Making coverage available by 2005 to all individuals with incomes up to 200% of the poverty level would give coverage to more than 64% of the total uninsured. Later, the income-based premium subsidy would be expanded to provide affordable coverage to the remaining uninsured Americans with higher incomes.

Insurance reforms and basic benefits

The College also proposed that the private health insurance market be reformed so that health plans would qualify to participate in the premium subsidy program. Participating health plans would be required to offer coverage through state or regional purchasing groups, which would verify that each health plan meets new federal participation conditions.

Those conditions would include premiums based on the health risk of the whole insured community, rather than the individual; guaranteed renewability, regardless of change in health status; and protections against misleading advertising. Purchasing groups would offer simple, one-stop enrollment, giving individuals the buying clout now available only to large employers.

Participating health plans would also have to offer a benefits package that includes preventive and screening services that clinical evidence has proven effective. An independent commission created by Congress would recommend a basic benefits package, which Congress would approve.

The commission would monitor the effectiveness of each step to expand coverage and recommend mid-course corrections as necessary. It would also recommend disincentive measures for opting out of the new forms of affordable coverage.

The College has modeled its proposed premium support program after the Federal Employees Health Benefit Program. This plan gives federal employees subsidies to buy coverage from hundreds of health plans that meet federal requirements.

State opt out

The College's plan recognizes the wisdom of dividing responsibilities between state and federal governments. Although achieving affordable coverage for all requires action by Washington, ACP-ASIM proposes that states be given the freedom to design and implement alternative programs for universal coverage.

States could apply for a waiver to design alternative programs, as long as they could guarantee their programs would cover as many people as and provide comparable basic benefits to the federal program. Federal dollars that otherwise would have been spent on premium subsidies, Medicaid and S-CHIP programs would be redirected to support such state initiatives.

Achieving change

ACP-ASIM recognizes that Congress will not automatically embrace our seven-year plan and make it law. We also recognize the complexity of achieving the proposed changes.

But the College's leadership is hopeful that by releasing this plan, we can begin to undermine the conventional belief that universal coverage is an unrealistic, impossible dream. We will challenge critics who disagree with our proposals to come up with their own plan to provide coverage for all.

In short, our bold objective is to shift the discussion from "why it can't be done" to how affordable coverage for all can be achieved by the end of the decade.

Robert B. Doherty is ACP-ASIM's Senior Vice President for Governmental Affairs and Public Policy.

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