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Universal Health Care Voucher System Could Be a Solution to US Health Care Financing Dilemma

Universal Health Care Voucher System Could Be a Solution to US Health Care Financing Dilemma

ABSTRACT: An article in the New England Journal of Medicine (Emanuel EJ, Fuchs VR: 352:1255-1260, 2005) proposes a dramatic alternative to our current health care financing system—universal health care vouchers offering basic medical coverage for all Americans. Cancer Care & Economics (CC&E) spoke with one of the authors, Ezekiel J. Emanuel, MD, PhD, about the financial and political realities of this proposed new system. Dr. Emanuel is chair of the Department of Clinical Bioethics at the Warren G. Magnuson Clinical Center, National Institutes of Health. He is also a breast oncologist.

CC&E: How does your proposed universal health care voucher (UHV) system work?

DR. EMANUEL: The UHV system is based on 10 fundamental features (see Table). Every American under the age of 65, regardless of medical history or ability to pay, would be given a voucher to purchase basic health insurance (including a drug benefit) from a qualified private health insurer or plan of their choosing. Individuals who wanted additional coverage beyond the basic package could purchase this out of pocket.

With vouchers, health care coverage would no longer be tied to employment. There would be no means testing for the vouchers, which would eliminate a costly administrative burden of the current system. The means-tested Medicaid system would be eliminated (except for long-term and nursing home care), and Medicare would be phased out. As people turned 65, they would simply continue to receive their vouchers.

CC&E: What is the estimated cost of implementing a UHV system?

DR. EMANUEL: The simplest way to estimate the cost is by multiplying the cost of a typical employer-provider insurance plan by the number of Americans who would be covered. The cost of extending equal coverage to all 250 million Americans under age 65 would be about $713 billion. I'm leaving Medicare out of the calculation, since it would be gradually phased out and wouldn't be affected at the onset. If we adjust the number up 7% to account for the fact that the uninsured tend to have more expensive medical needs than the average worker, it brings the total cost to $763 billion. That sounds like a huge amount until you balance it against the $800 billion employers and the government spend on a health insurance system that still leaves 45 million Americans without coverage. The universal health care voucher system offers everyone in the country basic insurance for about the same amount we're currently paying.

CC&E: How would the health care voucher system be funded?

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