Innovation in the health-care industry has led to a dizzying array of technologies, drugs, and services, but many of those cutting-edge options are available only to Americans with health insurance. In fact, those without insurance—some 45 million Americans in 2005, including more than 8 million children—can struggle to find even adequate care.
Under this proposal, all Americans who do not have health insurance coverage would enroll in Medicare Part E, a self-sustaining insurance mechanism that would harmonize premiums for all enrollees and subsidize premiums for low-income Americans. In terms of benefits, payment system, rules, regulations, and administrative bureaucracy, Medicare Part E would rely on those already in place for Medicare, thereby easing the start-up process.
Several principles govern the creation of our Medicare Part E(veryone) proposal. First, universal health insurance coverage is necessary. Second, there should be no gaps in coverage. Third, coverage should be provided at the lowest possible cost to individuals and society. Fourth, the private sector should be involved when it can add value. Fifth, the program should be easy to explain and built on the existing infrastructure so that it can be implemented quickly. Finally, although additional reforms to the health care system — including cost-containment initiatives — are desirable, they should not be a prerequisite to universal coverage.
This proposal adopts Medicare rules and payment systems to provide the same benefits to the enrollees in Medicare Part E(veryone) as current Medicare beneficiaries receive today. Private health plans could participate through Medicare Parts C and D, offer Medigap coverage, and continue to offer private health insurance coverage. Firms could buy into the Medicare Part E program for all of their employees, and they would contribute at least as much to the premium as their employees do. Those without employer-based coverage could enroll individually. The Part E premium, which would be the same for every enrollee, would be determined using Medicare actuaries to “break even” over each year. The federal government would use a sliding scale to subsidize the premium for individuals whose income is below 400 percent of the federal poverty level. This proposal estimates that Medicare Part E would initially enroll 121.3 million beneficiaries for a total net cost to the government of about $94.4 billion. Coverage would be universal, continuous, and affordable.