The Commonwealth Fund has advanced a plan that it says would insure 44 million of the estimated 48 million uninsured Americans and would offer new health insurance choices to individuals and small businesses for 30 percent less than what employers pay now. Dubbed the “Building Blocks” plan by the Commonwealth Fund, it would preserve employer-sponsored health insurance, Medicaid, and the State Children’s Health Insurance Program (SCHIP), and would offer a Medicare-like option along with a choice of private health plans through a national “health insurance connector” or a purchasing cooperative that is modelled after the Massachusetts plan. The connector would be open to small businesses, the self-employed, and everyone without large employer insurance or Medicare.
According to the article “Building Blocks for Reform: Achieving Universal Coverage with Private and Public Group Health Insurance” the plan could save $1.6 trillion over 10 years if it is coupled with efforts to reform how the United States pays for health care.
The plan proposes to use a national entity called a connector that could offer individuals and small businesses a choice of private plans or a Medicare Extra plan. Medicare Extra is a proposed new insurance product with benefits similar to those in the Federal Employees Health Benefits plan.
About 60 million people would get their health insurance through the connector, most as a result of small businesses deciding to buy into the connector and its plan choices. About 14 million would be previously uninsured and an additional 1.2 million would be individually insured who switch to the connector.
In addition, the plan would require that all applicants receive health insurance with premiums that are community rated, i.e., the rates are the same for all enrollees in a given plan regardless of age or health status (insurers would decide what premium to charge); tax credits to help make premiums affordable; and expanded Medicaid and state CHIP coverage for low-income adults and children.
The proposal would also require employers to either provide health insurance or pay seven percent of earnings up to $1.25 an hour into a pool to help finance coverage.
“If a typical worker made $40,000 a year, the employer would be contributing $2,800 a year,” says Karen Davis, president of the Commonwealth Fund.
Details of the plan and its framework are published in the May/June issue of Health Affairs.