Urban Institute Proposes National Healthcare Plan Combining Elements of ACA, Medicare

Another organization has announced a plan for making health coverage affordable, following a spate of similar proposals like “Medicare for All” and “Medicare Extra for All” and in the wake of continued efforts by the Trump administration to nibble away at the Affordable Care Act (ACA).

The Urban Institute estimates that the plan would cover more people for less money, resulting in 15.9 million fewer uninsured people, and reduce total healthcare spending by $28.9 billion in its first full year of implementation. The proposal builds on pieces of the Medicare program and the ACA marketplaces to create what it says is a proposal that is less ambitious than a single-payer system, but would get close to universal coverage with much lower increases in federal spending and less disruption for people currently enrolled in employer coverage or Medicare.

Although none of the proposals have any chance of being implemented in the current political climate, the authors of “The Healthy America Program: Building on the Best of Medicare and the Affordable Care Act” said that they “anticipate that public demand for improvements to the health insurance system will grow.”

Public support for the ACA, as well as Medicaid, has generally remained steady despite a failure by Republicans last year to repeal it outright.

Their plan would allow people to keep their employer-sponsored coverage, offer a range of insurer options and ensure pooling of healthcare risk, lack an employer mandate, provide income-related federal assistance, and create a more flexible individual incentive to remain insured than that under the ACA.

It would integrate Medicaid acute care for nonelderly people and the Children’s Health Insurance Program with coverage for people enrolled in private nongroup insurance and currently uninsured people into a large new Medicare-style marketplace. This marketplace would include both a public plan and private insurer options and would cap provider payment rates.

The Healthy America plan calls for saving money on prescription drugs, the topic of President Trump’s speech last Friday. The plan proposes extending the Medicaid rebate on drugs covered under Part D of Medicare for low-income beneficiaries. Citing previous figures from the Congressional Budget Office, the plan suggests that at least $10 billion could be saved by extending rebates to low-income beneficiaries in the first year of implementation and the savings would grow by a large amount over 10 years.

The administration favors moves such as allowing association health plans to sell across state lines, which policy experts say will increase premiums for fewer benefits, while shifting people out of ACA plans.

A few elements of the Healthy America plan include:

• Preserving ACA essential health benefits.
• Setting household premiums in a range from 0% to 8.5% of income; premium subsidies are tied to 80% in an actuarial value plan.
• Cost-sharing subsidies increase actuarial value above 80% for people with incomes up to 300% of FPL; cost-sharing options with actuarial value below 80% are also available.
• While there is a penalty for individuals remaining uninsured, it is structured as loss of a tax benefit (instead of a penalty), which can be partially refunded later if the taxpayer enrolls in coverage.
• Low-income people would automatically be enrolled.