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  The Do No Harm Affirmative Case:
    Summary of the Plan
This plan is designed to eliminate three biases in federal policy.
  • The bias toward employer provision.
  • The bias toward third-party provision.
  • The bias toward government provision.
Elements of the Plan

In particular, we propose to:

I.  End the bias in favor of employer-provided insurance and against individually owned insurance:

A. Replace the current system of tax subsidies with a system of tax credits equal to $1,000 per adult and $500 per child.
  1. These tax credits would be available to every American who obtains private insurance, regardless of income and regardless of how the insurance is obtained. (See "Reforming the U.S. Health Care System.")
     
  2. Employers would continue to be able to purchase insurance for their employees; but employees would be able to purchase their own insurance if they did not like their employers' plan. (See "Characteristics of an Ideal Health Care System.")

B. Allow employers to purchase insurance for their employees that is personal and portable; and allow individuals to purchase such insurance on their own. (See "A Proposal to Create Personal and Portable Insurance at the State Level.")

II.  End the bias in favor of third-party insurance and against individual self-insurance:

A. Allow individuals to have completely flexible medical savings accounts (MSAs) from which to pay expenses not paid by a health plan. (See "MSAs For Everyone, Part I.")

B. Allow the tax credit to apply against MSA deposits in addition to health insurance premiums.

III.  End the bias in favor of government insurance and against private insurance:

A. Enable people who now rely on free care and charity care to acquire private insurance instead.

B. Allow low-income families on Medicaid and children in CHIP programs to enroll in private insurance instead. (See "Characteristics of an Ideal Health Care System.")

C. Allow seniors on Medicare to enroll in private insurance instead. (See "Defined Contributions as an Option in Medicare.")

Funding for the Plan
We propose to fund this proposal with dollars that are now used by government to fund the current system. That is:
  • The total cost of the system of tax credits would be roughly equal to the cost of the current federal, state and local tax subsidies.
  • People who leave Medicaid would be able to apply to private insurance the average amount Medicaid now spends.
  • Seniors on Medicare would be able to apply to private insurance an amount roughly equal to the average amount Medicare now spends.
  • As people leave the free care system by enrolling in private plans, we would fund their tax credits by reducing the funding of the public safety net.

Since the American health care system is already the most expensive in the world, we do not believe it needs more dollars. But if additional funds turn out to be needed to implement this plan, we are not adverse to the additional spending.

Enforcement

We propose the following enforcement mechanisms:

  • State governments would continue to regulate private insurance to prevent abuse.
  • Large companies with employees in many states would have access to federally qualified insurance that would be federally regulated in every state.
  • Special federal anti-fraud provisions would prevent the abuse of medical savings accounts.
Advantages

Under this plan:

  • Ordinary working Americans would have access to health insurance that meets their needs more than their employers' needs.
  • In most cases their insurance would be personal and portable, and would not end merely because of a change in their employment status.
  • Because they could have a continuing relationship with an insurer, they could also have continuing relationships with health care providers, which would ensure continuity of care.
  • The financial help from government to purchase private insurance would be the same, regardless of their income, and their subsidy would not be lowered just because they happened to earn a lower wage.
  • They would be able to manage some of their own health care dollars through accounts they own and control; and they and their insurers would be able to take advantage of the most efficient ways of paying for and monitoring the delivery of mental health care.
  • And, instead of being segregated into inferior health care plans, the poor and the elderly would have access to the same kind of health insurance everyone else has access to.

This plan would not solve every problem. But it would eliminate systematic bias throughout the health care system against the mentally ill.

 
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