HEALTH SECURITY FOR ALL AMERICANS
A Straightforward Plan to Protect
Us
When a Catastrophic Illness Strikes
by Joan Eisner
Life, liberty, and the pursuit of happiness--impossible to achieve without affordable, quality health care. Our next great moral civil rights battle should be to ensure that every American has the right to health care.
Let's keep it simple. No individual or family should have to spend more than 10% of their taxable income on health care. Once that amount has been spent, they are eligible for advance, refundable Federal tax credits to pay their medical bills.
For a rich nation, our health care is a mess. In any two-year period, one out of three Americans under age 65 has a period of time when they are uninsured. Those with insurance find it less and less helpful. In 2004, 10.7 million insured Americans had to spend more than 25% of their income on health costs their insurance didn't cover. Daily employers are dropping coverage. Some are even suing their retirees to drop coverage! Unmet health costs are a leading cause of personal bankruptcy.
Those without health insurance get sicker and have a life of stunted opportunity. According to the National Academy of Science's Institute of Medicine, each year at least 18,000 Americans die prematurely and unnecessarily because they lacked health insurance.
Americans need and want health security. A ten percent of taxable income limit on expenses would bring peace of mind to millions each year.
How would it work? Very easily, actually. The type of services covered by the plan most used by Members of Congress - Blue Cross standard option -
would be covered by the credits. Payment rates would be limited to the rates paid by Blue Cross, thus keeping costs reasonable. Everyone who has health insurance would still want to keep it, because 10% of an $80,000 income is still a lot of money and people would like insurance help with meeting their health bills. But they would always know that their out-of-pocket costs would never be overwhelming--that they would never lose their home because of a catastrophic illness. And by helping reduce hospitals and providers' unpaid bills and bad debts, the program would help slow private health insurance inflation and ensure fairer payment to providers.
The system would be progressive - and those with zero taxable income would be eligible or the refundable credits immediately. Taxable income doesn't start until after personal exemptions and the standard deduction is taken - for tax year 2003 that was at $7800 of income for an individual, $15,600 for a couple. Therefore, when an uninsured couple making $20,000 a year or taxable income of about $4,400 incurred $440 worth of medical bills (equaling ten percent of taxable income), they would sign a statement or pledge telling the provider that they estimated they were eligible for the Federal refundable tax credit program.
The provider would cash the pledge with the Federal government and be immediately paid the reasonable amount. At the end of the year, the IRS would reconcile incomes with pledges and make any necessary adjustments.
Basically, the IRS would be the catastrophic insurer and for many lower income individuals, insurance, with all its hassles, deductibles, and co-pays would not be necessary
How to pay for what would be an expensive program? Canceling the tax cuts for the upper income brackets and closing a few of the new corporate loopholes would be the price for ensuring that no American would ever again financially fear for their health and the health of their family.
Joan Eisner lives in Fall Church, Virginia. Her email is: wkvjee@hotmail.com