There have been many comments on the editorial page criticizing the Affordable Care Act but offering no alternative. I am offering an alternative that mirrors our current state and federal programs; State Unemployment Insurance and Federal Unemployment Insurance.
It is reported more than 80% of those who have health insurance receive it as a benefit of employment. As employers offer this benefit, I propose to make them as financially responsible for an employee’s health insurance as they are for an employee’s unemployment benefits.
Currently, health insurers are licensed by the states that set the standards for insurance companies doing business in the state. Some of this has been changed by the implementation of the Affordable Care Act.
A federal law change would allow health insurers to sell insurance in all 50 states. There would be no ceiling on the total benefits paid on a policy for any illness; there is no such thing as a pre-existing condition. There is no full time or part time distinction.
Once an employee is hired and a member of a group insurance program, the employee can never lose health insurance coverage. This coverage would continue even if the employee was terminated from employment with cause.
Whether or not the employee is eligible for unemployment insurance, the employee can draw on funds similar to unemployment insurance to maintain coverage with a limited version, catastrophic version, of the previous group policy with a deductible of no more than $1,000 for a family. This would be continued until the employee is re-employed.
This benefit would be funded by employers in the same way unemployment insurance is currently funded — with a quarterly tax to the state (SUI) and an annual tax to the federal government (FUI). It can be called State Unemployment Health Insurance and Federal Unemployment Health Insurance.
In addition, all employer paid health insurance not recovered by a employee payroll deduction would be taxable with that portion of an individual’s taxes used to fund this program. If an individual stops looking for a job, that individual would be immediately come under an arm of Medicare or state aid program.
Employers would choose the coverage for their employees much as they do today; it can be as comprehensive based on what they believe is competitive in the marketplace. If certain coverages are excluded in the employer plan, these options would be offered, and employees who want that coverage can pay for it with a payroll deduction.
No doubt there is going to be resistance to this proposal by employers. My intent is to make this tax neutral. This could be done by allowing employers either a tax credit or a reduction in the percentage rate on wages paid for good experience such as is allowed for them now when employee terminations are minimal and draws on their unemployment funds are less.
If you are a small company employer, one, up to fifty employees, you must offer health insurance to your employees if you, as the employer, have health insurance. Insurance companies can offer this type of group policy to small companies as a whole segregated by zip codes.
If you are a single proprietor with no employees, you can apply for the same group policy as if you had employees. You are qualified by being in business for a profit and filing a Schedule C as part of your tax return. You cannot be denied because of any pre-existing condition as you are joining a group based on your zip code.
This is a basic outline of my alternative. It takes the government out of health care and puts it back in the hands of our citizens.