Sessions/Cassidy Health Plan Particulars
Twelve Bold Ideas
- A Universal Heath Tax Credit: Modeled after the child tax credit, this tax credit varies by age and geography, but not income and will average $2,500 per adult and $1,500 per child in 2017 – an amount that should give almost everybody access to a private plan similar to a well-managed Medicaid plan. It applies to spending on health insurance premiums and deposits to HSAs. It is advanceable, refundable and assignable and can be easily administered by H & R Block, insurance brokers, employers, etc.
- Limited Benefit Insurance: Individuals may receive a portion of the tax credit when they choose a plan which includes a limited amount of income and asset protection and is more suitable for low-income family budgets.
- Health Status Insurance: For the first time, people with pre-existing conditions will have real protection against discrimination and against the “race to the bottom,” reflected in narrow networks and high drug costs for the chronically ill. Risk adjustment between health plans (similar to Medicare Advantage) will insure each plan receives an actuarially fair premium when receiving an enrollee from another plan. (Plans will not benefit by seeking the healthy or avoiding the sick.) Plans are free to voluntarily agree to better risk adjustments, so there will eventually be free market risk adjustment. We expect plans to eventually specialize, with some plans becoming focused on cancer care, others on heart care, etc.
- Roth Health Savings Accounts: They are flexible, they can wrap around any third-party insurance plan and they are an alternative to use-it-or-lose-it insurance. Above the tax credit amounts, premium payments and HSA deposits will be made with after-tax dollars. In this way, individual self-insurance and third-party insurance will compete on a level playing field. Individuals will be able to save for future health care and have an active role in managing the money that pays for their care.
- A Workable Safety Net: A portion of unclaimed tax credits (for people who remain uninsured) will be sent to safety net institutions in communities where the uninsured live. This replaces and supplements disproportionate share money under the current system. For the first time, federal tax relief for private health insurance and federal support for safety net care will be completely integrated. Money follows people.
- Transparency: Insurers will make their provider networks known in real time and on line. Bait and switch (advertising a broad network and then narrowing it after enrollment) will not be allowed. Plans that impose high costs on enrollees for specialty drugs must disclose the fees in a very visible way prior to enrollment. Providers who accept package, cash payments must publicly disclose the price.
- Tax Fairness at Work: For the first time, the federal government will give everyone the same tax relief for health insurance, regardless of where it is obtained – at work, in the marketplace or in an exchange. Employees will not be able to double dip, however. Other tax relief, such as the ability of an employers to purchase insurance with pre-tax dollars, will be clawed back or topped up to the tax credit amount.
- Portability. Federal laws that prevent employers from providing their employees with portable insurance that travels with the employee from job to job and in and out of the labor market are repealed.
- Liberating Medicaid. Medicaid will be block-granted to the states for each of four Medicaid populations. Over time, the per capita amount from the federal government for each of the populations will be equalized, nationwide. See here and here. Medicaid enrollees will have the option of leaving Medicaid, claiming the tax credit and purchasing private insurance.
- Liberating the Doctor-Patient Relationship: Doctors will be able to form “direct pay” or “concierge” relationships with their patients (including phone and email consultations) without fear of being regulated as insurance companies. Patients will be able to pay for these services from their HSA.
- Liberating the Local Practice of Medicine: CMS will be able to lift national restrictions on doctor-owned hospitals, clinics and other facilities; state and local restrictions on walk-in clinics, free standing surgical centers and other market-based services; and state restrictions that in other ways prohibit the delivery of high quality health care.
- Grandfathering. To minimize potential disruption, self-insured employer plans and labor union plans may elect to remain in the current tax system. Individuals with insurance obtained from an (ObamaCare) exchange may elect to remain in that system.
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