Urban Institute researchers are offering a health reform proposal they say would provide universal access to comprehensive coverage, broaden risk pools, provide income-related federal assistance and create a “more flexible individual incentive to remain insured" than the Affordable Care Act (ACA).
The 24-page proposal from the left-leaning group, called The Healthy America Program, would keep most of the current healthcare structure in place, including employer-sponsored insurance.
Urban Institute said its plan would result in almost 16 million fewer uninsured people and could reduce healthcare spending by $28.9 billion in its first full year of implementation.
In this proposal, people currently covered in nongroup plans, Medicaid and the Children's Health Insurance Program (CHIP) would get rolled into the Healthy America plans. Uninsured people, as well as those in employer-based plans, would also have the option to join a Healthy America plan.
Urban Institute’s plan doesn't go as far as revamping the system like a single-payer system or Medicare for All would do. Instead, it would combine Medicaid, CHIP, individual insurance and the ACA exchanges under one umbrella and anyone can join.
“In Healthy America, we try to strike a balance by retaining Medicare and employer-sponsored insurance while significantly changing Medicaid and nongroup health insurance," according to the proposal. "Our goals are to keep what people like, change what is not working and limit the increase in new federal costs.”
While Republican efforts to repeal the ACA are mostly on the back burner for now, both sides of the aisle continue to refine proposals to improve the country's healthcare system. Some states are looking at conservative policies like Medicaid work requirements, while others are embracing more liberal ideas aimed at universal coverage. The Trump administration has been steadily chipping away at the ACA by promoting short-term and association health plans that don't have to meet the law's requirements and by zeroing out the individual mandate penalty.
Urban Institute estimated its Health American plan would cover about 117.1 million nonelderly people.
Nearly 60% of those in Healthy America plans would come from Medicaid or CHIP, 12% from nongroup and 14% would be previously uninsured. The report expects 4% of nonelderly legal U.S. residents would remain uninsured, as would 63% of undocumented nonelderly residents.
The report also expects employer coverage would drop by 18.3 million people with those Americans choosing the Healthy America plan over their employer plan. Urban Institute estimates 16% of Healthy America’s enrollment would include people who leave employer plans and employer-sponsored insurance would drop to 47.5% of the nonelderly population.
“Employer-sponsored insurance has been essentially constant since the implementation of the coverage components of the ACA, but the Healthy America program increases financial assistance and eliminates the ACA’s ‘firewall’ between employer-sponsored insurance offers and the purchase of subsidized nongroup insurance," according to the report. "Employers, particularly large employers, would continue to use tailored insurance benefits to attract and retain workers.”
Concerning costs, Healthy America would result in employers spending $110.6 billion less as members choose a Healthy American plan. Urban Institute expects out-of-pocket costs would also drop by $5 billion.
The proposal would increase federal government spending, however. With more people covered in public subsidized plans, the federal government’s healthcare spending would increase by $97.9 billion. But state funding would drop by $32.4 billion as Medicaid and CHIP are rolled into the new federal program. Overall, the plan would increase government funding by $65.6 billion. The proposal also calls for states to make payments of $185.1 billion to help offset the federal spending.
“We estimate that over 10 years of the Healthy America program, federal spending would increase by $1.2 trillion and state government spending would decrease by $422 billion, resulting in a net increase in total government spending of $790 billion, or roughly 0.025 percent of GDP,” Urban Institute said.