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. Health maintenance organizations or professional foundations would be paid by capitation or approved budget. Independent physicians and dentists could be paid on fee-for-service basis or by capitation. Payments to practitioners would come from earmarked portion of total area budget. Supplemental stipends could be paid to practitioners locating in remote or deprived areas. System could also reimburse practitioners for costs of continuing professional education. The Health Security Board would establish schedules of allowances for fee-for-service 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' wages and on unearned income up to $15,000 a year (12% of costs); 2.5% tax on self-employed (2% of costs); and the balance (50%) from Federal general revenues. Annual taxable wage base for employed persons would always be 125% of the social security wage base. Employers would pay on total payroll without maximum. Persons over age 60 could exempt the first $3,000 in unearned income from the 1% health tax. Employers could agree to pay part or all of their employees' required contribution. Program would not alter existing employer obligations to purchase health benefits for present or former employees and would require employers to absorb all or part of the employees' tax if employer's current obligation for health benefits exceeded 3.5% of payroll. G. Cost Estimates Committee for National Health Insurance estimate: program would cost $73 billion in fiscal year 1976, of which $21 billion represents money which would have been spent on medicare and medicaid. 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 HMOs and professional foundations. Would establish at the Federal level a Commission on the Quality of Care to assess standards and regulations safeguarding quality of services under the program. Health Care Insurance Act-S. 444/H.R. 2222 (SENATORS CLIFFORD P. HANSEN, VANCE HARTKE/REPRESENTATIVES RICHARD H. FULTON, JOEL T. BROYHILL) A. General Approach A voluntary health insurance program called "medicredit," under which the Federal Government would pay health insurance premiums for the poor, and allow income tax credits for all others toward the purchase of private health insurance plans. The amount of tax credit would include 1) 100% of premium charges for catastrophic insurance plans and 2) an income-related percentage of premium charges for other health insurance providing certain basic benefits approved by the Government. Medicare would continue as at present. B. People Covered The total population under age 65 would be eligible. Those with no Federal income tax liability would receive full payment of their health insurance premium costs. For all others, the Federal share of health insurance premiums gradually decreases from 99% until those with a tax liability of $891 or more would get a tax credit of 10% of premium cost. C. Scope of Benefits A health care policy, in order to qualify under this program for purposes of a tax credit, would have to provide, at a minimum, the following benefits: (1) 60 days hospitalization (with days in skilled nursing facility counting as 1⁄2 hospital day or 2 days of nursing home care for each hospital day), including nursing services, drugs, blood, appliances, maternity and psychiatric care, physical therapysubject to $50 deductible. (2) Home health services, ambulance service, emergency or outpatient hospital services (including diagnostic services, X-rays, lab tests, etc.)-subject to 20% coinsurance on first $500 of expense. (3) Medical care by physician, in hospital or office, including diagnosis and treatment, psychiatric care, immunizations, physical exams, lab services, radiation therapy, maternal and wellbaby care-subject to 20% coinsurance. (4) Dental care for children ages 2 through 6 years, and emergency dental services and oral surgery for all ages (age limit to be gradually increased to cover all under age 18)-subject to 20% coinsurance on first $500. (5) Catastrophic coverage-unlimited hospital days, up to 30 additional days in skilled nursing facility, outpatient blood and plasma after first 3 pints, prosthetic aids. All subject to deductible of 10% of combined taxable income of eligible and dependent beneficiaries, reduced by total of deductibles and coinsurance incurred under basic coverage. D. Payment to Providers Usual and customary charges for all services, including hospital and extended care. E. Administration Establishes Health Insurance "Advisory" Board to write policy and regulations. Private insurance companies would each administer their own approved policies. F. Financing Costs of health insurance for the poor would be met by Federal general revenue expenditures and by reductions in Federal income tax collections for those receiving tax credits. G. Cost Estimates Sponsor estimates cost of program to be $12.1 billion for first full year of operation. 4 National Catastrophic Illness Protection Act-S. 587/H.R. 1054 (SENATOR J. GLENN BEALL/REPRESENTATIVE ROBERT A. ROE) 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 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. HÊW 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 HEW estimate of additional cost to Federal taxpayer, fiscal year 1974-$3.3 billion. |