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“Access to Health Care and Long-Term Care for All Americans"

March 2, 1990

Summary:

Recommendations on Access to Health Care

THE PEPPER COMMISSION PROPOSAL ASSURES UNIVERSAL HEALTH CARE COVERAGE FOR ALL AMERICANS THROUGH A JOB-BASED/PUBLIC SYSTEM.

1.

Businesses with 100 or fewer employees are encouraged to provide health insurance for their employees and non-working dependents.

To make insurance more available and affordable:

The private insurance market is reformed.
A minimum package is available.
Tax credits/subsidies for certain small employers are
available.
Self-employed and unincorporated businesses can deduct
100% of their premiums.

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If employers purchase coverage and achieve a specified coverage target, there is no requirement to provide private insurance participate in

the

federal public health insurance plan ("public plan").

or

2.

All businesses with more than 100 employees must provide private health insurance (for a specified benefit package) or contribute to the public plan for all employees and non-working dependents.

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The plan replaces Medicaid for the specified services and pays providers according to Medicare rules.

The fully phased-in plan is financed and administered primarily by the federal government, although states can opt to administer it.

4.

The minimum benefit package includes primary and

preventive care, physician and hospital care and other services. Services are subject to cost-sharing, with subsidies for low-income people and limits on out-of-pocket spending.

5.

System reforms include measures to contain costs, assure quality and initiate innovative delivery systems for the underserved.

6.

For both administrative and fiscal reasons, the plan will be phased in, beginning with making coverage available for children through the public plan.

7.

At full implementation, all Americans will be required to have health insurance through their employer or the public plan.

Phase-In Schedule and Cost of the Commission Health Care Proposal

(Dollars are in Billions, 1990)

Year 1

оо

Initiate Insurance Reforms.
Allow all uninsured pregnant woman and children through age 6, to
enroll in the public plan (fully subsidized to 185 percent of
poverty).
Raise Medicaid reimbursement rates for obstetrical and pediatric
care.

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Total Net New Federal Cost:
% of Americans Without Health Insurance:

$3.4
14%

Year 2

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Firms with fewer than 25 employees and average payrolls below $18,000 become eligible to receive a 40% tax credit/subsidy for the

cost of health insurance that is provided. Employees of these firms with family income of less than 200

percent of poverty receive a subsidy. Public plan is available to uninsured children up to age 18. Improve physician reimbursement.

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Total Net New Federal Costs:
Additional Cost from Year 1:
% of Americans Without Health Insurance:

$13.5-16.8
$10.1-13.4

8%-11%*

Year 3

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Firms with 100 or more employees are required to provide health insurance or contribute a portion of payroll to cover employees and dependents in the public plan.

Total Net New Federal Costs:
Additional Cost from Year 2:
% of Americans Without Health Insurance:

$17-20.3

$3.5
6%-8%*

Year 4

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If 80% of uninsured employees of firms with 25-100 employees (as
of year 1) are not insured through their employers, along with
their dependents, all employers of this size are required to:
provide coverage or contribute toward the cost of their coverage
in the public plan.
Raise Medicaid hospital reimbursement rates.

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*Total Net New Federal Costs:
Additional Cost from Year 3:
% of Americans Without Health Insurance:

$19.8 - 23.1

$2.8
5%-7%*

Year 5

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If
80% of uninsured employees of

firms with fewer than 25 employees (as of

year 1) are not insured through their employers, all employers of this size are required to provide coverage or contribute toward the cost of their coverage in the public plan. Allow all uninsured adults into the pu plan. Retain subsidy to small firms with low wage employees.

оо

Total Net New Federal Costs:
Additional Cost from Year 4:
% of Americans Without Health Insurance:

$31.8 $11.8 0%**

Year 6

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Retain subsidy to small firms with low wage employees and their employees.

Total Net New Federal Costs:
Additional Cost from Year 5:

$31.8

$0

Year 7

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Eliminate explicit subsidy to small firms with low wage workers and their employees.

Total Net New Federal Costs:
Additional Cost from Year 6:

$23.4
($8.4)

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Depends on how many smaller firms voluntarily choose to purchase health insurance.

** If 80 percent of uninsured workers and their dependents in firms of fewer than 25

are
now insured the Secretary of Health and

Human Services must submit to Congress a plan to insure any remaining uninsured. If employers with fewer than 25 do not meet this target, then the imposition of a requirement to cover all workers and their dependents or contribute to a public plan will ensure that all Americans now have health insurance.

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