Feature Story

October 18, 2007

A Roadmap to Health Insurance for All: Principles for Reform

From The Commonwealth Fund:

Presidential candidates, governors, and members of Congress are advancing proposals to expand health insurance coverage to all Americans---the most important step in improving access to quality health care.

This report, prepared for The Commonwealth Fund Commission on a High Performance Health System, explores the different options and how each may not only increase coverage for the uninsured, but also improve quality and efficiency and gain control over spiraling health care costs.

Proposals are grouped into three approaches: tax incentives and the individual insurance market; mixed private/public group insurance with shared responsibility for financing; and public insurance.

Proposals that build on our current mixed private-public system of health insurance with shared responsibility for financing coverage by government, employers, and households.

An estimated 10 to 40 percent of premiums is consumed by claims administration, underwriting, marketing, profits, and other administrative costs.

By building on multiple forms of existing group coverage and adding a new group insurance option, these proposals, on their own, would not make enrollment easier or more seamless.

The income tax system can also provide an administrative mechanism for income-related premium assistance and ceilings on out-of-pocket costs as a percent of income.

These approaches would pool risk by building on the large risk pools of the employer market and public programs and create new health insurance exchanges with regulations against risk selection.

If Medicare, Medicaid/SCHIP, and employer coverage were redesigned to reward health care providers for higher quality or more efficient care, even further savings are possible.

The financial distribution of costs is likely to be closely proportional to earnings, and more progressively shared than financing under most approaches that provide tax incentives for coverage through the individual market.

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