As the 2020 presidential campaign enters its final weeks, the Covid-19 pandemic has largely driven the broader issue of healthcare reform from the daily news. Yet underlying weaknesses of the U.S. healthcare system, including the lack of universal, affordable access to care and the linkage of health insurance to employment, are as much to blame for the inadequate response to the pandemic as are the more widely discussed details of testing, contract tracing, and mask mandates.
The lack of attention to structural reform of healthcare is especially worrisome given the Trump administration’s continued support for a lawsuit that would abolish the ACA. The Supreme Court is currently expected to hold hearings on that suit just after the election. In a detailed report, Universal Catastrophic Coverage: Principles for Bipartisan Healthcare Reform, Niskanen Center offers a potential replacement for the ACA. Here are some comparisons of the UCC approach with the sketchier proposals offered by the Democratic and Republican campaigns.
Healthcare in the Democratic Platform
The 2020 Democratic Platform includes a section on healthcare reform based on proposals made by candidate Joe Biden during the primary campaign. Here is a brief side-by-side comparison that highlights the similarities and differences between the Democratic proposal and Niskanen Center’s UCC approach:
|2020 Democratic Platform||Universal Catastrophic Coverage|
|A public option. The plan would augment the Affordable Care Act by adding a public option to the menu of choices available on ACA exchanges.||Universal coverage. UCC would replace the ACA with a new system of affordable universal coverage with costs scaled to household incomes.|
|Automatic free coverage for some poor. The plan promises automatic enrollment in the public option, without deductibles or premiums, for 4 million low-income citizens in states that have not expanded Medicare.||Automatic free coverage for all poor. Recipients would benefit from automatic enrollment in UCC without deductibles or premiums for all low-income households.|
|Cap on household medical costs. Premiums would be scaled to income and capped at 8.5 percent of income. ACA assistance for out-of-pocket costs, scaled to income, would continue.||Cap on household medical costs. Premiums (if any) and out-of-pocket costs would be scaled to household income in a way that guarantees affordability to everyone.|
|Employer-sponsored insurance. ESI would continue to exist, but individual employees would be allowed to switch to the public option if they did not like their ESI plan (no “firewall”).||Employer-sponsored insurance. UCC would replace ESI as the basic form of coverage for all workers. Employers could offer additional “wrap-around” coverage for benefits beyond the basic UCC package.|
|Medicare. Medicare would continue for seniors. The minimum age for Medicare enrollment would be lowered to 60.||Medicare. UCC would gradually replace Medicare, but existing beneficiaries would be allowed to continue their Medicare coverage or switch to UCC.|
|Cost reductions. The Democratic plan includes a package of cost-reduction measures for prescription drugs and other services.||Cost reductions. UCC would include a comprehensive system of market-based cost reduction measures.|
Republican healthcare proposals
We cannot provide a good side-by-side comparison for GOP healthcare proposals, since the Republican party decided not to offer a new platform for 2020. The 2016 platform (now the 2020 platform) offers few details beyond a general commitment to “improved access to affordable, high-quality healthcare” for all Americans, based on vague promises of protections for pre-existing conditions, price transparency, and cost-controls. Despite its support for the abolition of the ACA, the Trump administration has not backed any specific replacement proposal beyond the hazy language in the 2016 platform.
Currently, the only full-formed Republican legislative proposal is Rep. Bruce Westerman’s Fair Care Act (H.R. 1332). The Fair Care Act, which features a reinsurance scheme to hold down premiums and a robust set of cost-cutting measures, differs in concept from both UCC and the Biden plan. Still, in its own way, it offers a good chance of reaching the common goal of universal, affordable access to care.
Historically, universal catastrophic coverage itself has strong Republican roots. As Richard Nixon’s Secretary of Health, Education, and Welfare, Elliot Richardson advanced such a proposal under the name of Maximum Liability Health Insurance. Richardson, in turn, based his plan on an earlier proposal for Major Risk Insurance made by Martin Feldstein, then a young professor at Harvard and later Chairman of the Council of Economic Advisers under President Ronald Reagan. Milton Friedman also endorsed the concept in a 2001 essay for the Hoover Institution.
Reportedly, some people on the Republican side of the House have been working on a new UCC-based proposal, but no bill has yet emerged. We can only hope that their efforts are far enough advanced to put something on the table quickly, should the Supreme Court put an abrupt end to the ACA.
Click here to download Niskanen Center’s full proposal for Universal Catastrophic Coverage.