Universal catastrophic coverage would offer protection from those expenses that are truly unaffordable.
Universal catastrophic coverage (UCC) would make an excellent centerpiece for the next round of healthcare reform. In fact, UCC is not even particularly new to the conservative playbook. Respected thinkers like Martin Feldstein, who would go on to serve as Ronald Reagan’s chief economic adviser, promoted the idea already in the 1970s. In 2004, Milton Friedman, then a fellow at the Hoover Institution, also endorsed the concept. UCC would make healthcare affordable, both for the federal budget and for American families. And because it would throw no one off the healthcare roles—not 22 million people, not 2 million, not anyone—it offers a realistic chance of the bipartisanship that polls show both the Republican and Democratic rank and file want.
.. the deductible might be set equal to 10 percent of the amount by which a household’s income exceeds the Medicaid eligibility level, now about $40,000 for a family of four. Under that formula, a middle-class family earning $85,000 a year would face a deductible of $4,500 per family member, perhaps capped at twice that amount for households of more than two people. Following the same formula, the deductible for a household with $1 million of income would be $96,000.
.. Very likely, many middle-class families would forego supplemental insurance and cover all of their routine health care costs from their regular household budgets, the way they now pay for repairs to their homes or cars. Doing so would be easier still if they took advantage of tax-deductible health savings accounts—a mechanism that is already on the books, and could be expanded as part of reform legislation.
.. UCC would mesh seamlessly with Medicaid, since anyone not on Medicaid or Medicare would automatically be covered. There would no longer be acoverage gap, as there is in many states under the ACA. If workers on Medicaid got new jobs or promotions that raised their income above the Medicaid limit, the transition would be painless, since the UCC deductible for households just above the Medicaid cutoff would be low. The tremendous work disincentive that now exists for workers approaching the Medicaid “cliff” would disappear.