Report proposes near-universal health coverage system allowing individuals, small businesses to purchase insurance through private plans or new Medicare-like option

A national health insurance "connector" program that allows individuals and small businesses to buy public and private health coverage could provide insurance for up to 44 million uninsured U.S. residents, according to an article by the Commonwealth Fund published in the May/June issue of the journal Health Affairs, CQ HealthBeat reports.

Under the proposal, the government-operated connector authority would offer lower-cost health plans, including a "Medicare Extra" plan built on the existing Medicare system (Nylen, CQ HealthBeat, 5/13). All employers would be required to provide coverage for workers or contribute up to 7% of their payrolls into a fund to generate about $45 billion (Dixon, Reuters, 5/13). Tax credits would be used to ensure that premiums account for no more than 5% of income for lower-income families and 10% for higher-income families. People who remained uninsured would automatically be enrolled in a plan when their taxes are filed.

According to a Commonwealth Fund release, if the plan is adopted, the number of uninsured U.S. residents could be reduced from 48.3 million people in 2008 to four million people in the first year the plan is implemented. The article estimates that as many as 60 million people would enroll in coverage offered through the connector program.

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Cathy Schoen, lead author of the article and senior vice president of the Commonwealth Fund, said, "This approach will eliminate wasteful administrative costs, enable people to keep their coverage if jobs or circumstances change, and provide affordable health insurance with good access to health care and financial protection for all." She estimated that the plan could save $1.6 trillion over 10 years if implemented in combination with new health information technology and negotiated prescription drug prices. The proposal would require about $15 billion in new spending, with the rest offset by reduced administrative costs (CQ HealthBeat, 5/13).

Commonwealth Fund President Karen Davis said, "Each of these features certainly has elements that will give pause to some groups," but "I think the basic bottom line is that if everyone will give a little, it means you can get universal coverage." According to Davis, those who would experience increased costs as a result of the plan include employers not currently offering coverage, health care providers not treating beneficiaries of current public health programs and companies selling individual health plans (Reuters, 5/13).

Dallas Salisbury, president of the Employee Benefit Research Institute, said businesses likely would support some of the article's proposals, including maintaining current tax exemptions for employer-sponsored coverage. "There's a consensus that an employer-based system should continue to be part of [the] overall approach," he said, adding that employers "want to continue to be part of the system" (CQ HealthBeat, 5/13).

The May/June issue of Health Affairs includes a number of articles that focus on prospects for health care reform in the current election cycle. The issue contains articles and perspectives by political pollsters, scholars and lawmakers, who examine the political climate surrounding health insurance, proposals for overhauling the health care system and past attempts at instituting a national health insurance program. The journal also includes articles that discuss important elements to be considered when evaluating health care proposals (Health Affairs release, 5/13).