Universal Health Care Vouchers
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Plan StatusPublished.Number of People CoveredAll Americans.
Estimated Cost$828 billion (not including the Medicare population).
Payment Scheme A value-added tax would fund health care vouchers.
Each American would receive a voucher to use to purchase a basic health care coverage package from private providers. |
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Plan in Brief
- Ezekiel J. Emanuel, M.D., Ph.D., is chair of the National Institutes of Health’s Department of Bioethics. Victor R. Fuchs, M.A., Ph.D., is Henry J. Kaiser Jr. Professor Emeritus at Stanford University in departments of economics and health research and policy.
- Emanuel and Fuchs say that inefficiencies in the health care system and growing costs will thwart most proposals to revamp the system because those proposals fail to provide the right incentives and infrastructure for cost-effective care.
- The plan calls for universal, guaranteed issue coverage funded by a tax and for the elimination of approaches and programs that add to administrative costs (e.g., employer-based coverage, means testing).
- Emanuel and Fuchs state that this plan is more politically feasible than other proposals because it balances individual choice and egalitarianism—two essential features of the American national character.
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Impact on Federal Government
- Medicare and Medicaid would be phased out.
- Establishes a federal health care review board, akin to the Federal Reserve Board, that would define and monitor the level of coverage, communicate the program, administer the voucher system, assess the success of the program in terms of care provided, and report to Congress.
- Some funding for long-term care would still have to be provided.
Impact on States
- Medicaid would be phased out.
Impact on Insurers
- The private insurance market would continue to provide the basic level of care to individuals, who purchase it using their health care vouchers.
- The industry could continue to offer other services to Americans who wish to purchase them with post-tax dollars.
- The plan advocates multi-year contracts to save on administrative costs and maximize the effects of quality health care.
- Consolidation of the industry is likely.
Impact on Providers
- Providers would continue to contract with private health plans for coverage of services.
Impact on Employers
- The employer-based system would probably be eliminated.
- According to the plan authors, the labor market would thus be more efficient.
Impact on Individuals
- Guarantees a basic level of health care coverage to all.
- Allows individuals choice of how to use their voucher to choose plans and providers.
- Makes coverage portable rather than employment-dependent.
- One directive of the national health board would be to advocate for patient safety.
Proponents/Opponents
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Proponents applaud the universal coverage and guaranteed issue aspects of the plan. They also point out that the plan would not require major changes in the way that care is provided. Employers will favor it, proponents say, because it eliminates the administrative burden of health care.
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Critics are opposed to an increase in taxation, warning of its effects on the economy and predicting that a value-added tax will only grow over time. Also, providing a choice of plans and providers does not address all aspects of administrative costs and confusion. Even those who favor the plan caution that it will be a challenge to define and enforce the basic level of care and to ensure that administrative costs really are minimized.
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For Further Information
A Comprehensive Cure: Universal Health Care Vouchers
Getting Covered: Choose a Plan Everyone Can Agree On
Beyond Health Care Band-Aids
Solved! It Covers Everyone. It Cuts Costs. It Can Get Through Congress. Why Universal Health Care Vouchers Is the Next Big Idea
Health Care Expenditures Reexamined: An Editorial by Victor R. Fuchs
HealthCareGuaranteed
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Key Targets for InvestmentPrivate insurance market.
Cost-effectiveness studies.
Electronic medical records.
Notable Feature
- The justification for the plan includes consideration of the American character—Americans are inclined to resist single-payer systems because they favor individual choice. This plan is designed to fit that aspect of the national character.
- In proposing a value-added tax (VAT), the plan acknowledges resistance but points out that such taxes can be designed to be progressive, have worked in other nations to fund social initiatives, are easily administered, and are not easily evaded.
- The plan calls for establishment of an independent institution—the Institute for Technology and Outcomes Assessment--that would study the cost-effectiveness of treatment approaches.
- The estimated cost of the plan, at $828 billion for universal coverage, compares favorably with the $954 billion that is now spent on health care by the government and employers and that leaves 45 millions Americans uninsured. (These estimates do not include the current Medicare populaton.)
Experts' Comments“Probably only comprehensive reform of health care finance—the way the funds are raised and the way they are paid out—can bring about the necessary organizational changes that will give physicians the information, infrastructure, and incentive to deliver cost-effective care to the entire population.”
-- Victor R. Fuchs
Annals of Internal Medicine, 2005
“The beauty of this system is this: Very little change would be noticed by people in the current private delivery system or by users of health care insurance, and it's politically viable. When the Pew Research Center in 2003 asked Americans if they would support universal health care even if it meant rescinding Dubya's tax cuts, 72 percent said yes, including a majority of Republican respondents.”
-- John Hanchette
The Niagara Falls Reporter, 2005
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