After health reform goes into effect, every American citizen and
legal resident will receive a Health Security card. Once you get
your card, you will never lose your health coverage -- no matter
what. If you get sick, you're covered. If you change jobs, you're
covered. If you lose your job, you're covered. If you move,
you're covered. If you start a small business, you're covered.
The card guarantees you a comprehensive package of benefits
that can never be taken away. Those benefits are as comprehensive
as the ones that most Fortune 500 companies offer their employees.
The package includes doctor and hospital care, as most insurance
plans do, and also covers prescription drugs and a host of other
services. [See chapter 4] You will also receive something rarely
found in today's insurance plans -- preventive care.
No matter which plan you choose, you will also receive
something. The plan will pay 100 percent of the costs for a wide
range of preventive care services, including prenatal care, well
baby care; immunizations; disease screening for adults, such as
mammograms, Pap smears, and cholesterol tests; and health promotion
programs, like stop-smoking classes and nutrition counseling.
You will be able to choose your doctor. Every American will
have a choice of health plans -- and plans will enroll everyone who
applies, regardless of age, occupation or medical history. While
prices will vary among plans, each health plan will charge everyone
the same price for the guaranteed, comprehensive benefits package.
Employers or insurance companies won't decide how or where or from
whom individuals get their care -- you, the consumer, will decide.
You will be able to follow your doctor into a traditional
fee-for-service plan, join a network of doctors and hospitals, or
become a member of a health maintenance organization (HMO). For
older Americans, the Medicare program will be preserved and
strengthened with new coverage of prescription drugs. There will
also be expanded options for home and community-based long-term
care.
Like today, almost all of us will be able to sign up for a
health plan where we work. Brochures will give you
easy-to-understand information on several health plans -- the
doctors and hospitals involved, an evaluation of the quality of
care, and prices. There will be regular "report cards" that measure
quality and consumer satisfaction for each plan. Once a year,
consumers will have a chance to choose a new plan. If you are not
satisfied with your care or service, you can "vote with your feet"
and pick a new plan, something most people can't do today.
If you're self-employed or unemployed, you can sign up through
the health alliance in your area by phone or through the mail.
Alliances, run by boards of consumers and local employers, will
contract with and pay health plans, guarantee quality standards,
provide information to help consumers choose plans, and collect
premiums. They will, in effect, take on roles similar to major
corporate benefits offices. The largest national corporations --
those employing 5000 workers or more -- have the option of
continuing to self-insure their employees or joining regional
alliances. For the consumer, particularly people who work, the
local alliance will be largely invisible. It will help you get
good prices on insurance, but you'll still sign up for health care
at work.
In order to get care, most people will do what they've always
done -- go to the same doctors, hospitals, pharmacies, or other
providers. More providers will organize into "networks" -- groups
of doctors, nurses, hospitals, and labs that cooperate together to
coordinate the care of their patients and control costs. Once
you've picked a plan, if you need to go to the doctor for a
check-up or if you get sick, you'll simply take your Health
Security card, show it at the doctor's office, and they'll take
care of you. Then you'll fill out one standard form, and you're
done. So when you get sick, you won't be buried in forms -- and
neither will your doctor or hospital.
Unless your employer chooses to pay your entire premium, you
will contribute about 20% of the cost. Your share of premiums will
be deducted from your paycheck, the same way most people pay now.
If your employer wants to pay the full cost of your premiums, that
will always be an option. In addition, individuals will pay
limited co-payments or deductibles to their health plans as part of
their coverage. People who are either self-employed or unemployed,
but still can afford to contribute, will send in a monthly check
for insurance. (See charts at the end of the chapter.)
Today, most businesses offer health coverage to their workers.
For these businesses, health care reform which provides universal
coverage will mean a tremendous benefit. No longer will these
businesses bear the costs of other businesses and their employees
-- through higher premiums and higher taxes to pay for people
without coverage, or by covering spouses working for other
businesses. And no longer will premiums continue to rise out of
control. This will mean that businesses will be more competitive
and be able to create more jobs.
Currently, health care costs represent an increasingly large
financial burden for businesses of all sizes. Firms now pay as
much as 20 percent of their total payroll just to provide health
care coverage for their workers. Under the Health Security Act, no
business will ever pay more than 7.9 percent of their payroll for
health insurance.
________________________
"Successful implementation of health care reform is one of the best
pieces of news American business could receive."
Henry AaronHealth Economist, Brookings Institute
________________________
Small Business in the New System
Today's health care system is stacked against small business
owners, their families and employees. Small businesses, who are too
small to have benefits departments, are burdened by high
administrative costs -- as much as 40 cents of every dollar of
their premiums -- compared to only 5 cents for large companies.
They are charged higher premiums because they don't have the
bargaining power that large companies do to get the best prices
from insurance companies. And they are the most vulnerable to
sudden rate hikes if even one employee gets sick.
Despite these obstacles, most small businesses -- particularly
those with more than one or two employees -- do provide insurance
for their workers. And most of those that do not cover their
employees want to provide insurance but find it impossible in a
health care system that discriminates against them.
The Health Security Act creates a level playing field that
will finally allow small businesses to provide affordable coverage
for their employees without being discriminated against because of
their company size. The Wall Street Journal has said that the
Health Security Act will be "an unexpected windfall" for many small
businesses that currently provide insurance to their employees.
These companies will likely pay substantially less under reform --
because of lower premiums and reduced administrative costs. And
those small businesses who are charged far too much today to
provide a "bare-bones" package for their families and employees
will finally be able to afford to provide a comprehensive benefits
package -- in many cases without spending much more than they
currently pay for less coverage today. The Health Security Act
will level the playing field for small businesses in the following
ways:
* Small businesses will no longer face outrageous administrative
costs because they will join together to get the same benefits --
in terms of bargaining power and administrative simplicity -- that
big businesses have today.
* Small businesses will be charged the same rate as large
businesses to provide coverage to their workers.
* Small businesses that now provide insurance will see their
premiums decrease when they no longer have to pay for uninsured
workers.
* The Health Security Act will outlaw insurance company
practices -- ranging from price gouging to refusing to insure
entire industries -- that make it impossible for small business
owners to get insurance today for their families or employees.
* Reform will also streamline the workers' compensation system
-- which is a never-ending source of frustration, fraud, and high
costs for small businesses today.
* Self-employed Americans will now be able to deduct 100% of
their premiums -- instead of the 25% allowed by law today.
Discounts for the Smallest Companies
Those small businesses that provide no health coverage today will
have to help pay for their employees' health care. The Health
Security Act is specifically designed to protect small businesses
and help them make the transition to a system that guarantees their
families and employees the health security they deserve. Those
low-wage businesses with 75 or fewer employees will receive
substantial discounts on the price of insurance, depending on the
size of the company and the average wage.
* For the smallest firms that pay the lowest wages -- such as
restaurants -- the percent of payroll devoted to health care may be
as low as 3.5 percent. That amounts to $350 a year for a company
with average wages of $10,000 -- or less than $1 a day per
employee.
* These discounts apply to most small businesses with less than
75 employees, even those that currently provide health insurance to
their workers.
* The vast majority of small businesses -- especially the "Mom
and Pop" firms that are so vital to the American economy -- will
find that the savings they reap in the cost of health insurance for
their own families will substantially offset any new spending
required to cover employees.
An Overview of the New System
The Health Security Act rejects the idea of a government-run
health care system. Health care will remain rooted in the private
sector. Most people will get insurance through their employers, as
nine out of ten people do today. The plan achieves universal
coverage and recognizes that some direction from the government --
including asking everyone to pay their fair share -- will be
necessary to achieve that goal. But it leaves the tasks of
delivering care and controlling costs to the private market.
The Health Security Act seeks to build on what works best in the
American economy and fix what is broken. What works best is a
competitive market that provides products and services to Americans
at the highest quality and lowest price.
But the competitive power of the market is not working in
today's health care industry. Today, insurance companies compete
not on the basis of price and quality, but by excluding people who
might become sick.
The system is also broken in another fundamental way: small
and mid-sized businesses, the self-employed, and average American
families are powerless to bargain with insurance companies. Today,
only big business has the clout to negotiate lower prices. The
little guy -- the local hardware store, the entrepreneur, the young
family -- ends up getting stuck with high prices and excessive cost
increases.
The Health Security Act seeks to fix these problems so that
all Americans benefit from a truly competitive health care
marketplace. First, the Health Security Act outlaws insurance
company discrimination based on age, sex, or medical condition.
Instead, it makes insurance companies compete based on how well
they cover all of us, and not how well they exclude some of us.
The Health Security Act joins consumers and small businesses
together in health alliances so that they can have the same
bargaining power that the largest companies get. After reform,
every American will have bargaining strength to get low prices and
high quality care.
For the first time, consumers will be in the driver's seat
when it comes to finding quality health care. Health plans will be
forced to compete on providing the best care at the most affordable
prices. This will provide incentives for everyone in the health
care business to operate more efficiently -- incentives that don't
exist today.
Flexibility
Realizing the goals of the Health Security Act requires that
we build in flexibility. National reform establishes a framework
within which states and local communities make their own choices.
Americans cannot, and need not, come to one vision of the single
best approach to health care.
Consequently the pace of reform will vary across the country.
Some states are already well along in addressing the need for
health reform. Some have served as models, forging paths that other
states will follow as they implement reform. Under the Health
Security Act states will begin implementing reform in 1996, and all
states are to begin implementing reform by the end of 1997.
Reflecting the geographic diversity of our nation, the Health
Security Act allows for each state to tailor health reform to its
unique needs and characteristics as long as it meets national
guarantees and standards for quality and access to care. Certain
states, in fact, may choose to set up a single-payer system, where
one agency collects and distributes all health care dollars for
that state. Flexibility is essential because we know that what
works in North Dakota may not work in North Carolina.
Although the Health Security Act establishes a national
framework to achieve the goals of reform by spelling out standards
and the comprehensive benefits that every American must receive, it
does not prescribe how to deliver care or organize services. It
leaves those decisions to consumers, doctors, nurses, hospitals and
managers of health plans, rather than to the government. The
Health Security Act establishes protection at the national level to
ensure security -- the solid foundation upon which American
communities are free to build. Then it gets government out of the
way to allow the reformed, private market to work.
