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.
Many of the conservatives most engaged in the details of health care in recent years, meanwhile, thought its credit was not well designed to allow most people to obtain at least catastrophic coverage
.. Many of the conservatives most engaged in the details of health care in recent years, meanwhile, thought its credit was not well designed to allow most people to obtain at least catastrophic coverage.
.. The great bulk of the relative coverage loss that the agency projects is a function of three core assumptions. First, it assumes that well over 10 million Americans now buy coverage only because they don’t want to pay the individual-mandate penalty and simply wouldn’t buy any insurance absent a penalty. Second, it assumes that Medicaid spending growth will accelerate much faster than overall health spending in the coming years
.. The great bulk of the relative coverage loss that the agency projects is a function of three core assumptions.
- First, it assumes that well over 10 million Americans now buy coverage only because they don’t want to pay the individual-mandate penalty and simply wouldn’t buy any insurance absent a penalty.
- Second, it assumes that Medicaid spending growth will accelerate much faster than overall health spending in the coming years
- And third, it assumes that letting insurers have much more latitude to offer people different kinds of insurance products (including coverage with premiums equal to the new tax credit they could receive) would not result in significant numbers of new insurance products that could appeal to consumers.
.. Most conservative health-reform plans in recent years proposed to make an individual mandate unnecessary by using “continuous coverage” protections
.. a 30 percent surcharge on the premiums of people who have been without coverage for more than three months. This is certainly an inadequate spur to get covered, and indeed it would tend to discourage healthier people from getting insured.
.. it does not do enough to enable people with incomes just above Medicaid eligibility to purchase attractive coverage.
.. The House Republican proposal has clearly been designed with a very specific set of assumptions in mind about what can make it past the Byrd rule in the Senate, and these assumptions account for most of the bill’s peculiar features
.. They also account for much of the bill’s trouble both with Republican members of Congress and with the CBO.
.. a repeal of the law’s taxes, mandates, and subsidies that left in place its regulations would leave far more people uninsured than would a complete repeal that also eliminated the law’s insurance rules. This is because eliminating those regulations would let insurers offer more-varied products and give them a better chance of surviving in the individual market. The same is surely true regarding the House Republican bill: If it repealed more of Obamacare, it would help more people get covered.
.. the House Republican bill occupies an untenable middle space between two more-plausible approaches to conservative health-care reform.
.. On the one hand, House Republicans might conclude that it is not their job to solve procedural problems in the Senate and then proceed with a bill that aggressively rolled back Obamacare’s regulations and replaced them altogether. Such a bill would return nearly all insurance regulation to the states and subsidize catastrophic coverage (with continuous-coverage protection and a credit more generous at the bottom) in a way that enabled everyone in the individual market to afford at least that much.