Economists at the Urban Institute, an independent research group, released on Sunday a proposal that would get the nation to near-universal health-care coverage and relieve many of the financial burdens some people face under the current system — and cost the federal treasury far less than more radical plans. It would leave in place Medicare and the employer-based health-care system, whereby most Americans get their insurance. But it would create a new health-care marketplace for most everyone else — those on Medicaid and the Children’s Health Insurance Program, which are government initiatives for low- income people, and those buying insurance on their own in the individual market.
As under Obamacare, insurance companies could not deny people essential care. But the federal subsidies helping people buy coverage would be more generous, pegged to the “gold” tier of plans in the current system. The subsidies would scale with income; some people would get free coverage; even at the high end, no one would pay more than 8.5 percent of their income in premiums for a gold plan. People could take this money and buy into a new, government-run plan, or they could purchase coverage from private insurers. Crucially, doctors, hospitals and other providers would be barred from charging private insurers in the new market more than they charge Medicare, which could lower costs dramatically in areas of the country served by only a few providers whose market power allows them to set high rates.
Because many people would pay premiums and other forms of cost-sharing, they would have some skin in the game. Between this and the fact that employer insurance would continue , the cost to the government would be about $98 billion in the first year — a lot, to be sure, but far less than a switch to single-payer. Insurers would be protected from catastrophic costs through permanent reinsurance and risk-adjustment programs, mechanisms that stabilized the system in Obamacare’s early years. Given the size of the new market, more insurers and most providers would probably participate.
The Urban Institute calculates that the plan would help those currently struggling to afford insurance — and cover about 16 million additional people. Nearly half of those still left uncovered would be undocumented immigrants ineligible for the program.
This is hardly the only option between sabotage and single-payer. For example, Sens. Tim Kaine (D-Va.) and Michael F. Bennet (D-Colo.) have proposed a public-option plan that would make more incremental improvements to Obamacare. The point is that those advocating change can be both humane and practical.