Expanding Medicare and employer plans to achieve universal health insurance
K. Davis
Department of Health Policy and Management, School of Hygiene and Public Health, Johns Hopkins University, Baltimore, MD.
This article presents a proposal for expanding Medicare and employer-based
health insurance plans to achieve universal health insurance. Under this
proposed health care financing system, employees would provide basic health
insurance coverage to workers and dependents, or pay a payroll tax
contribution toward the cost of their coverage under Medicare. States would
have the option of buying all Medicaid beneficiaries and other poor
individuals into Medicare by paying the Medicare premiums and cost sharing.
Other uninsured individuals would be automatically covered by Medicare.
Employer plans would incorporate Medicare's provider payment methods. This
proposal would result in incremental federal governmental outlays on the
order of $25 billion annually. These new federal budgetary costs would be
met through a combination of premiums, employer payroll tax, income tax,
and general tax revenues. The principal advantage of this plan is that it
draws on the strengths of the current system while simplifying the benefit
and provider payment structure and instituting innovations to promote
efficiency.
