Frequently Asked Questions About Guaranteed HealthCare

The Plan	Health Plans	Current System
Management	Cost	General Questions

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The Plan

Q. What is the Guaranteed HealthCare Access Plan?

A. The Guaranteed HealthCare Access Plan permits the bearer of a healthcare certificate to exchange it for a defined standard health plan from a participating health insurance company or healthcare provider organization. The Guaranteed HealthCare plan is funded by the Federal government which issues healthcare certificates annually. Every American is eligible to receive a healthcare certificate regardless of age, employment or health status. A participating health plan must agree to accept a certificate in exchange for a standard health plan, as defined by the Federal government, regardless of the health status, pre-existing conditions, age, etc. of the applicant.

Q. Will I be free to choose my own healthcare provider?

A. Yes, although the Guaranteed HealthCare system is established by law and guaranteed and regulated by the government to ensure fairness and competitiveness, the government does not run the system. Physicians and other health care providers will continue to operate privately as they do today. Consumers are free to choose their physicians and other healthcare providers; the range of options is determined by the health plan selected.

Health Plans

Q. What is a participating health insurance company or healthcare provider organization?

A. A participating health insurance company or healthcare provider organization agrees to provide a federally approved standard health plan coverage in exchange for a healthcare certificate, regardless of health status, pre-existing conditions, age, etc. and not to cancel a policy for any reason. It is estimated that, once fully implemented, the system will offer most individuals five to eight plans to choose from in any region of the country.

Q. What incentives do participating health insurance companies and healthcare provider organizations have to provide greater value if the standard plan is defined?

A. Participating health insurance companies and healthcare provider organizations will be competing for clients on an individual by individual basis. While these companies will not be able to compete on the basis of price, they can compete on the basis of the overall service they provide to their clients and/or additional services above those specified in the standard plan. In addition, plans may differ in the cost incentives built into their structure, emphasizing prevention programs, for instance.

Q. How comprehensive will the standard health plan be?

A. The components of the standard health plan that insurance companies and healthcare provider organizations must offer in order to participate in the system are comparable to the Federal Employees Health Benefits Plan, the plan that federal employees and Congress have to choose among today.

Q. Would I be able to purchase additional coverage?

A. Yes, although standard health plans would be very comprehensive and satisfy the needs of virtually every citizen, a higher level of coverage can be purchased at the individuals expense with after tax dollars.

Current System

Q. What happens to my current employer provided health insurance benefit?

A. Employers would no longer be involved in providing employees with health insurance coverage. The relationship would be between the individual and participating health plans. Employers would be free to offer their employees health insurance coverage above the standard health plan, but this would be a taxable benefit.

Q. What happens to the value of my employer provided health benefit?

A. Those employers currently providing a health benefit program to their employees will be required to convert the value of these benefits, less historically demonstrated internal administrative expenses, to wages. These additional wages will be considered income for tax purposes.

Q. What about the tax benefit I receive from my employer provided health benefit?

A. Currently, employer provided health benefits are not taxed, but wages are. Under the Guaranteed HealthCare system, this tax advantage would be eliminated, leveling the playing field for all citizens.

Q. What will happen to Medicare?

A. Once the Guaranteed HealthCare plan in enacted, Medicare would no longer be offered to everyone turning 65. Those already covered by Medicare will have the option of staying with the Medicare or switching to the Guaranteed HealthCare system.

Q. What will happen to Medicaid and other means-tested programs?

A. Medicaid would eventually be phased out over an agreed upon transition period negotiated with the states. The same would be true of SCHIP and other Federally-supported means-tested programs in which the states participate.

Management

Q. How will the Guaranteed HealthCare system operate?

A. The enabling legislation will create a Federal Health Board and affiliated Regional Health Boards. The Federal Board would be responsible for:

• defining the health benefit package
• determining the premium differences based on regional differences
• sponsoring research on performance of the healthcare system
• overseeing and coordinating the Regional Boards

Within their regions, the Regional Boards would be responsible for:

• managing enrollment into health plans
• certifying and overseeing the health plans
• paying the health plans the premiums for their enrollees
• assessing the quality of health care delivered by the health plans
• establishing Centers for Dispute Resolution and Patient Safety

Q. How is quality health care assured under the Guaranteed HealthCare system?

A. The enabling legislation also will include provisions for the creation of an independent Institute of Technology and Outcomes Assessment. The Institute would be responsible for:

• evaluating the effectiveness and cost of new technologies, drugs and procedures
• recommending best practices to health care providers and organizations based on its evaluations
• establishing standards for pharmaceutical and medical device companies based on its evaluations
• monitoring compliance industry-wide
• monitoring the quality of health care delivery industry-wide
• supporting the Federal Health Board in defining the standard health plan

Q. Who assures that the system is responsive to people's needs and treats everyone fairly?

A. The Federal Health Board and the Institute of Technology and Outcomes Assessment are public institutions whose primary responsibilities will be to assure the viability of the healthcare system over the long term in the interest of all Americans. These institutions will be advocates for the people and not the special interests.

Q. Why does the Guaranteed HealthCare system keep the insurance companies in the system with their track record of working only for their self interests?

A. While not judging the past practices of health insurance companies, it should be noted that their behavior has been consistent with the system in which they operate. The Guaranteed HealthCare system, through the Federal Health Board and the Institute for Technology and Outcomes Assessment, would change that operating environment to work to the advantage of the consuming public. Furthermore, insurance companies and healthcare provider organizations play necessary roles that would have to be created from scratch were they to be eliminated. For one, they act as a coordinating agent in an industry that is highly fragmented. They also provide an administrative function that to a very great extent is the grease that allows the system to function.

Cost

Q. How much will the Guaranteed HealthCare system cost to insure every American?

A. The total, non-Medicare, national health insurance bill for the US population under age 65 is estimated to be on the order of $828 billion. This amount is derived using certain assumptions, the first of which is the premium costs which are based on the annual premium for the Federal Employees Health Benefit system calculated for individuals and families in 2005. The total number also takes into account the assumption that the uninsured and Medicaid population will have expenditures higher than the employed population with private health insurance.

Projected Costs of the Proposed Guaranteed HealthCare Access System

Group Served	Number	Average Annual Premium	Total Annual Costs
Individuals	41.2 million	$4,728	$194.8billion
Families	65.2 million	$10,824	$705.7 billion
Total non-Medicare Population	257.6 million	NA	$778 billion
Increase for extra use by uninsured and Medicaid populations	25% of population	Added costs per person: 26% more than the average	$50 billion
Total non-Medicare	257.6 million	NA	$828 billion

That number needs to be compared with the total, non-Medicare, national health insurance bill for the same year which was on the order of $954 billion. This number includes the amount spend by Federal and state governments on Medicaid. The amount spent on private health insurance does not include out-of-pocket expenses for prescriptions, dental services and other products.

Current Employer-Based System (2005)

Type of Insurance	Total Annual Costs
Medicaid	$260 billion
Private Health Insurance	$694 billion
Total non-Medicare	$954 billion

Q. How do we pay for a Guaranteed HealthCare system?

A. There are a number of funding options that might be considered including a combination of employer/employee payroll taxes, a FICA-like surtax, or some form of a sales/consumption tax. Whatever the source of funding, it is critical that it be a discreet one, not a combination of revenue sources that are difficult to track and subject to abuse. The funding pool must be immune to budgetary raiding and at the same time, it should not have to borrow from elsewhere to make ends meet. Finally, it is important that the funding scheme assure that everyone contributes to the program whatever the sum.

The authors of the program advocate a dedicated Value Added Tax (VAT) as the funding mechanism. While relatively unknown in this country, it is a commonly used vehicle in Europe for funding social programs. The concept has a great deal going for it: it would represent a discreet revenue source; everyone would contribute; it could be tailored to exempt items such as food, clothing and shelter and it is automatic and unavoidable. While the funding source is an important component of the Guaranteed HealthCare plan, its resolution should not adversely impact the overall value of the program itself.

Q. How can I afford an additional tax when my healthcare costs are already high?

A. The Guaranteed HealthCare system would require the imposition of a new tax, whatever the specific form might be, but at the same time every taxpayer will see other taxes fall and in many cases see wages increase. Ultimately:

• Medicare taxes would fall and eventually be eliminated
• Federal income taxes would fall as Medicaid, SCHIP and other means-tested programs were phased out
• State contributions to these same programs would decline along with the decline in the Federal programs
• States would no longer need to provide health insurance benefits for their workers
• Wages would increase in those companies that had previously provided health insurance benefits

Q. Can the Guaranteed HealthCare system control the rising cost of health care?

A. The Guaranteed HealthCare system will limit costs in a number of ways:

• every healthcare consumer will have the ability to shop around once a year for the plan that best suits their specific needs and delivers the greatest value
• increase competition will keep the growth in costs down - the health plans will be required to compete for business and will do so on the basis of quality and service
• those wanting additional amenities, such as a private hospital room, will be required to pay for the premium out of their own pockets
• the Institute of Technology and Outcomes Assessment will play a major role in evaluating new drugs and procedures to assure that they provide benefits commensurate with their costs
• the Institutes diligence will have the added benefit of signaling pharmaceutical and medical device companies that their investments in new products must demonstrate value to the patient and the system
• the revenue source will be dedicated solely to cover the Guaranteed HealthCare program thus providing a specific monitoring mechanism to track total healthcare costs

General Questions

Q. Isn't the Guaranteed HealthCare system really socialized medicine and not compatible with American values?

A. No. Guaranteed HealthCare plan embodies bedrock American values of individual choice and control over healthcare decisions.

There are two parts to the healthcare equation  how it is delivered and how it is paid for. Under the Guaranteed HealthCare system, the Federal government assumes responsibility for providing the means by which every American can purchase a qualified health insurance plan financed by a dedicated tax revenue stream. On the delivery side, everyone would participate in a health insurance plan that would reimburse private healthcare providers for services rendered. Equally importantly, individuals will be free to select their own health insurance plan and their preferred healthcare providers. Having said that, the power to establish standards of cost, quality and service will reside with the Health Boards and the Institute of Technology and Outcomes Assessment, not insurers as is currently the case.

Q. How do we know that the Guaranteed HealthCare system will work?

A. One of the greatest strengths of the system is that it preserves the best features of the current system (independent health care providers and the administrative components of health insurance companies) while at the same time introducing elements of competition (every individual purchases his/her own standard policy and is free to choose his/her own healthcare provider) and government oversight that assures that it is public policy that drives the system and protects the interests of the public.

On a more practical level, the Guaranteed HealthCare Access Plan is far simpler than the current complex and fragmented healthcare system meaning that it is more transparent and responsive to consumer needs and public policy. It is a rules-based market system; the Federal government establishes the operating framework for the system, but leaves it to the private sector to organize and deliver healthcare. Finally, the Federal government is there to assure that the system is run in the public interest, not for the benefit of a few big players.