A Policy Proposal to Solve the Healthcare Coverage and Cost Conundrum
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The U.S. is an outlier among similarly wealthy countries on two important healthcare metrics: coverage and cost. Despite progress made by the Affordable Care Act, nearly 30 million Americans remain uninsured, translating into worse health outcomes, lower productivity, and shorter life expectancies. And the law did little to constrain health care costs, which are projected to grow twice as fast as the U.S. economy over the next 10 years, threatening to overwhelm federal, state, and household budgets. To identify suitable policy solutions and determine their feasibility, a mixed methods analysis was conducted including a literature review, a case study, and crosstabs. In keeping with the Public Management capstone requirements, this paper was written in the form of a memo to a key policymaker. This memo proposes a new national health insurance program incorporating elements of the Affordable Care Act and Medicaid to achieve universal coverage. While preferential tax treatment of employer health benefits would end, private insurance would not be entirely displaced. A Medicare long-term care benefit would also be created to meet the care needs of older Americans. To address the unsustainable growth in healthcare costs, this memo proposes a new federal entity empowered to set reimbursement rates for all healthcare products and services using a global all-payer budgeting system. These new programs would require $384 billion in new revenues in the first year and $4.4 trillion over 10 years, paid for with a payroll tax increase of 8.18 percentage points. This compares favorably with the $33 trillion cost of single-payer proposals such as Medicare For All. The author concluded that this proposal is plausible from a policy perspective and could garner the political support needed to ensure passage.