May 2001 • Volume 7 • Number 5
Key points the two lawmakers have been discussing
Republican Rep. Jim McCrery of Louisiana and Democratic Rep. Jim McDermott, M.D., of Washington have been discussing a plan for health reform that includes these ideas:
- The government should establish a relatively generous basic benefits package, perhaps using the Federal Employees Health Benefits Plan as a model.
- The insurance system should move from the current employer-based model to one based on individuals. Employers should pay employees additional wages with funds that previously had been spent on health insurance premiums.
- The government should mandate that everyone buy health insurance for his or her family in the private market. Individuals should use the additional wages left after taxes to purchase the insurance.
- Insurers should underwrite individuals using a community rating for everyone in the United States. "Today's insurance market is a mess: large-group coverage, small-group coverage, individual coverage, club plans -- it's nuts," said McCrery. "We ought to try to put some order in the insurance market, and community rating is the key to doing that. Yes, it's hard to convince other Republicans that it's something the government should mandate. But I'm willing to do that in order to create this private sector-managed universal system."
- The purchase of health insurance could be reported on the federal income tax return, and an income tax credit would be available to everyone who purchased insurance. The question is -- what credit is big enough to encourage employers to "cash out" employees so they can buy insurance individually? McCrery also goes a step further: He advocates redistributing the federal tax credit to give lower-income workers more incentive to purchase insurance."I can't figure out any reason why the government should subsidize my health insurance," he said. "I make enough money to go out and buy health insurance for my family."
- Some mechanism should be established to get funds to people who can't afford to pay for insurance and then wait for the tax credit.
- Finally, a default system should cover individuals who defy the mandate to purchase but then require care. They might be held responsible for paying back premiums, McCrery said.
FP Report is published by the AAFP News Department.
Copyright © 2001 by American Academy of Family Physicians.
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