NATIONAL HEALTH INSURANCE Brief Outline of Pending Bills Health Security Act-S. 3 (SENATOR EDWARD M. KENNEDY) A. General Approach A national health insurance plan, administered by the Federal Government, covering all U.S. residents, comprehensive in benefits, and financed by a combination of payroll taxes and general revenues. Includes provisions intended to improve quality and efficiency of health care delivery system; medicare would be repealed, but medicaid would continue as a supplemental program. B. People Covered All U.S. citizens and aliens admitted for permanent residence would be covered. Allows for reciprocal and "buy-in" agreements to cover certain nonresident aliens and in some cases U.S. residents traveling abroad. C. Scope of Benefits Comprehensive health benefits, including physician services, inpatient and outpatient hospital care, home health services, supporting services such as optometry, podiatry, devices and appliances, subject to the following exclusions: (1) Dental care initially limited to children under 15; covered age group is to be extended in each of succeeding 5 years until all under age 25 are covered. Once eligible, an individual is subsequently covered regardless of age. (2) Drug benefit limited to inpatient drugs, specified drugs necessary for chronic conditions, drugs provided through group practice systems. (3) Skilled nursing home care initially limited to 120 days with provision for expansion when feasible. (4) Mental hospital care is limited to 45 days per year active treatment; limit of 20 consultations per year for outpatient psychiatric care if provided by solo practitioner. Benefits are covered in full with no deductibles, coinsurance, waiting periods, maximums, or cutoffs other than the limitations described above. Effective date for benefits is July 1 of second calendar year following enactment. D. Payment to Providers A total area budget would be established for all services. Hospitals, skilled nursing homes, home health agencies would be paid on basis of negotiated budget designed to pay reasonable costs. Such payments would constitute virtually the total income of a hospital. Comprehensive health service organizations or professional foundations will be (1) paid by capitation or approved budget. Independent physicians and dentists may be paid on fee-for-service basis or by capitation. Payments to practitioners would come from earmarked portion of total area budget. Supplemental stipends may be paid to practitioners locating in remote or deprived areas. System may also reimburse practitioners for costs of continuing professional education. The Health Security Board would establish schedules of allowances for fee-forservice reimbursement. E. Administration Direct Federal administration by a 5-member Health Security Board within Department of HEW. National Health Security Advisory Council, representing consumers, providers of care, health organizations, etc., would advise Board on program operation. Regional authorities would be given strong discretionary powers. The program would substantially supplant private health insurance. F. Financing Financed by a 3.5% tax on employer's payrolls (36% of costs); 1.0% tax on employees (12% of costs); 2.5% tax on self-employed (2% of costs); and the balance (50%) from general tax revenues. Annual taxable wage base for employed persons would be $15,000 initially, rising subsequently. Employers would pay on total payroll without maximum. Certain unearned income of individuals would also be subject to 2.5% tax. G. Cost Estimates Committee for National Health Insurance estimate: program would cost $57 billion in fiscal year 1974. HEW estimate: $77 billion for fiscal year 1974. H. Other Major Provisions Authorizes a total of $600 million for a Health Resources Development Fund to be used in two years preceding program operation for development of health manpower, education, training, group practice, etc. After the program is in effect, 5% of the Health Security Trust Fund would be set aside for these purposes. Establishes national standards for providers and incentives to encourage preventive health care and formation of group practice arrangements. 2 National Catastrophic Illness Protection Act-S. 191 (SENATOR J. CALEB BOGGS) A. General Approach A Federal health reinsurance program, designed to encourage the development by the private insurance industry of policies which would provide extended coverage against the costs of catastrophic illness. The Government would reinsure against losses in instances where private insurance companies paid out more in benefits than they received in premiums. Involves creation of state-wide plans for extended health insurance coverage which insurers or state-wide pools of insurers would be required to offer all eligible individuals at a reasonable cost in order to qualify for Federal reinsurance program. B. People Covered Individual State resident (and his dependents) who makes appropriate application for such extended insurance coverage. C. Scope of Benefits A catastrophic health insurance plan offered by private insurers would be designed to cover costs of any and all medical care rather than specified benefits. Before payments would be made under the plan, a sliding deductible based upon adjusted income of an individual or family would have to be satisfied. The deductible would be equal to 1⁄2 of the amount by which the individual or family's adjusted income exceeds $1,000 but does not exceed $2,000, plus all of the amount by which such adjusted income exceeds $2,000. (A person with an adjusted income of $10,000 would have a deductible of $8,500; an individual with adjusted income of $5,000 would have a $3,500 deductible.) The deductible would be reduced by the amount of any out-of-pocket payments or any public or private third-party payments made on behalf of an insured person. D. Payment to Providers Present methods under private insurance. E. Administration Federal Government role mainly limited to contracting with private insurers for reinsurance coverage. An insurance company would pay the Government certain premiums or fees for reinsurance. HEW would also set premium rates to be used by private insurers in charging individuals for catastrophic health insurance plans. State insurance authorities would develop state-wide plan for extended coverage and would provide for pooling of risks among private insurers within a State. Where a state-wide plan cannot be established, private insurers would deal directly with the Federal Government. F. Financing Catastrophic insurance would be financed by means of payments of premiums to private insurers. The Government's reinsurance program would be financed through premiums paid by private insurers into a National Catastrophic Illness Insurance Fund. G. Cost Estimates No estimate available. (3) National Health Insurance and Health Improvements Act-S. 836 (SENATOR JACOB K. JAVITS) A. General Approach A national health insurance plan established through a gradual expansion of the medicare program to cover the general population. Benefits would be broadened to include certain services not presently covered under medicare. The medicare Part B premium would be eliminated. Medicaid would be continued. B. People Covered Medicare would be extended to all those over 65, the disabled, widows over 60, and widowers over 62 effective July 1972. Effective July 1974, the program would be extended to all citizens and aliens admitted for permanent residence. C. Scope of Benefits Same benefits as under medicare at the beginning: (1) 90 days of hospital care with $60 deductible and coinsurance of $15 per day after 60th day. (2) 100 days post-hospital extended care with coinsurance of $7.50 per day after 20th day. (3) Physician and related services including outpatient diagnostic services, home health services, and physical therapy. Additional benefits would be phased in, as follows: (1) Maintenance drugs for chronic conditions, effective July 1973. (2) Annual physical examinations, effective July 1975. D. Payment to Providers Until July 1, 1974, reasonable cost for hospitals and institutions and reasonable charges for physicians (as under medicare). Thereafter, new methods, developed in interim, may be employed. E. Administration Essentially the same as medicare. Federal administration using private carriers, intermediaries, and State health agencies for appropriate roles. New public insurance corporations could be set up to administer the program if private carriers and intermediaries could not do so properly. F. Financing Financed by taxes on employers, employees, and self-employed (3.3% each in 1976 and thereafter) with Federal general revenue contributions equal to 1⁄2 of the amount collected through payroll taxes. Annual taxable wages for workers would be $15,000; for employers, no taxable wage base would apply. (5) 60-226 O 71-2 |