A universal healthcare system can be established in the U.S. by leveraging existing structures like Medicare, Medicaid, and the insurance industry, using a range of provider and consumer incentives control costs. The old and disabled would continue to receive Medicare and government support would be available for low-income households. Here are components of the existing system that would be retained, expanded or tweaked in my proposed universal healthcare system:
Private Providers: Healthcare services would continue to be delivered primarily by a mix of private hospitals, clinics, and physicians, as is common in many universal systems like Canada's.
Standardized Coverage: All plans, public or private, would be required to cover a comprehensive set of essential health benefits, including hospitalization, prescription drugs, and preventive care.
Mix of Financing: Funding would come from a combination of taxation, premiums and cost-sharing.
Mandatory Enrollment: Coverage would be mandatory for all citizens and legal residents to ensure universal access and a stable risk pool.
Subsidies: Government-funded premium subsidies would be available for households where insurance costs exceed a certain percentage of their income. Providers would not know if a patient receives subsidies.
Benchmark Pricing: Payment rates for healthcare services would be based on local costs, as is current practice in Medicare Advantage plans. Pricing is transparent and public..
Cost-Control Incentives: Providers may charge more than the benchmark rate, but patients would pay the difference. If patients choose a provider who charges less than the benchmark rate for the same procedures, they get to pocket part of the difference. All providers must be licensed and meet quality and training standards.
Consumer Choice: Patients would have the freedom to choose among multiple insurers and healthcare providers.
Competitive Market: Licensing, scope-of-practice and training reforms would accelerate to increase provider supply in underserved areas.
State-Level Flexibility: The system could allow for state-level variation in administration and implementation, rather than a single, federally run program, while still adhering to national standards.
The question for this post is: why build on the old and not go for a single-payer system? Three reasons:
Several countries have successful multi-payer systems with similar characteristics to the one proposed, e.g. Switzerland and Japan.
Many Americans would oppose a highly centralized, top-down single-payer system.
The U.S. is a democracy. The government can’t just impose a massive single-payer system against the voters’ wishes. It would not last through the next election cycle.
Next: Mandatory participation