Pay-or-Play Ideas Make Employers Help Uninsured

Employers would have to “pay or play” in some proposals for how to boost coverage for the uninsured. The idea can be found in a report, “Cost and Coverage Analysis of Ten Proposals to Expand Health Insurance Coverage,” by the Lewin Group, undertaken for the Economic and Social Research Institute. All the proposals would boost federal spending by 1.5 percent to 3.7 percent.

The two pay-or-play proposals examined are by Jacob Hacker, PhD, of the Yale University School of Management and Alan Weil, JD, director of the Assessing the New Federalism project at the Urban Institute.

Hacker's “Medicare Plus” idea would provide employer-sponsored coverage to everyone under a single publicly operated health plan. Benefits would be similar to those currently offered under Medicare.

Weil's “Medical Security System” would be an insurance pool with a selection of private health plans. Included would be at least one zero-premium plan. Those entering more costly plans would have to pay higher premiums. A national board would determine the benefit package.

“Under both proposals, employers must either provide a minimum standard benefits package (that is, the benefits package offered in the public program) or pay a payroll tax,” says the report. “Employers who decide to offer coverage would be required to pay a minimum percentage of the premium — 85 percent for workers and 75 percent for dependents under the Weil proposal.”

In Hacker's plan, employers would have to pay at least 75 percent for those working 20 or more hours a week and 50 percent for those working fewer than 20 hours a week. So, would these proposals provide universal coverage? Not quite, says the report.

“Under either of these proposals, the number of uninsured would be reduced by about 37 million people, which is equal to about 88 percent of the 41.9 million people who currently lack insurance.”