"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.

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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:

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-

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The private insurance market is reformed.
A minimum package is available.

Tax credits/subsidies for certain small

available.

employers are

Self-employed and unincorporated businesses can deduct 100% of their premiums.

If employers purchase coverage and achieve a specified coverage target, there is no requirement to provide private insurance or participate in the federal public health insurance plan ("public plan").

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.

The public plan will cover employees and dependents that contribute and non-working individuals who buy in or are subsidized.

* 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.

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.

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

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

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

O

O

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

O

care.

Total Net New Federal Cost:

% of Americans Without Health Insurance:

Year 2

$3.4
14%

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.

Total Net New Federal Costs:

Additional Cost from Year 1:

% of Americans Without Health Insurance:

Year 3

$13.5-16.8
$10.1-13.4
8%-11%*

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:

Year 4

о

о

$17-20.3

$3.5
68-88*

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.

'Total Net New Federal Costs:

Additional Cost from Year 3:

% of Americans Without Health Insurance:

$19.8

23.1

$2.8
58-78*

Year 5

If 80% of

O

о

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 public plan.

Retain subsidy to small firms with low wage employees.

Total Net New Federal Costs:

Additional Cost from Year 4:

% of Americans Without Health Insurance:

Year 6

$31.8

$11.8

08**

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

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

Year 7

$31.8
$0

о

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)

⭑ 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 uninsured. If employers with fewer than 25 do then the imposition of a requirement to dependents or contribute to a public Americans now have health insurance.

insure any remaining not meet this target, cover all workers and their plan will ensure that all