How the $5,000 Credit is Used and Directed to Insurance and
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PROPOSAL |
Under Coverage for All, every person not on Social Security or receiving care from the Veterans Department receives a credit of, on average, $5,000 (adjusted regionally based on Medicare’s existing formula). The credit is paid for by an income tax on every person receiving the credit and a revenue tax by every business selling in the United States. Veterans may choose to transition off of VA care onto the credits.
The Credit can only be paid to qualified entities in our healthcare system: an insurer, a health maintenance organization, an integrated care network, an employer plan or union Taft-Hartley plan, an association health plan, a health payment cooperative or a state or community-managed health plan, for example state Medicaid. The Credit can NOT be used to fund a health savings account – every dollar has to go into the insurance or care network.
The Cost
Approximately 254 million Americans would receive the Credit, at a total cost of approximately $1.27 trillion. We currently spend almost $4 trillion on healthcare each year. The credits would not increase that amount, they would just shift the payment mechanism. The Credit can be supplemented with additional funds by individuals, employers and unions, allowing each to maintain their existing healthcare plans or to secure better healthcare coverage.
How the $5,000 Credit is Spent
Winners and Losers
Coverage for All will not significantly change the overall amount we spend on healthcare, however any policy change creates winners and losers. For most participants, Coverage for All won’t change how much is spent on their healthcare, it will just re-routes some of the money that pays for their care. Some participants in our system will likely see increases or decreases in what they are currently spending. Small businesses that don’t provide insurance will pay a little more, however they will also have access to a much wider pool of employees. People that don’t have insurance will also pay more, however they will finally have reasonable access to healthcare.
US Revenue instead of US Payroll
Taxes based on payroll have the hidden effect of encouraging businesses to replace workers with robots, or move them to contracting or the gig economy or to offshore their jobs. By based the Coverage for All tax on US revenue, every company that benefits from selling to US consumers also pays part of the cost of keeping those consumers alive.
Emergency Care
Coverage for All would establish a national Emergency Care Fund to directly fund emergency care across the country. Hospitals, urgent care centers, even individual doctors, can choose to participate in the emergency care program, with each participating facility or doctor receiving a flat fee plus additional usage compensation based on the number of emergency visits. Emergency rooms are not allowed to add additional charges for treating the people that pay into the fund. If a person does not choose an insurer or Integrated Care Network, their entire Credit is deposited in the Emergency Care fund, and paid out to the emergency care facilities that provide their healthcare.
The Credit can only be paid to qualified entities in our healthcare system: an insurer, a health maintenance organization, an integrated care network, an employer plan or union Taft-Hartley plan, an association health plan, a health payment cooperative or a state or community-managed health plan, for example state Medicaid. The Credit can NOT be used to fund a health savings account – every dollar has to go into the insurance or care network.
The Cost
Approximately 254 million Americans would receive the Credit, at a total cost of approximately $1.27 trillion. We currently spend almost $4 trillion on healthcare each year. The credits would not increase that amount, they would just shift the payment mechanism. The Credit can be supplemented with additional funds by individuals, employers and unions, allowing each to maintain their existing healthcare plans or to secure better healthcare coverage.
How the $5,000 Credit is Spent
- People have the option of contributing a part of their credit to the Emergency Care Fund
- A portion of everyone’s Credit goes to a High Risk Fund for hemophilia, etc.
- The balance is used for hospital and primary care
- The Credit is paid directly by the government to the designated insurer, plan or care provider
- Parents or guardians designate the insurer or care provider for their children
- If a person chooses insurance, to the person’s insurer of record
- If a person chooses capitation, to the person’s care network of record
- All can go to a network providing primary and hospital care
- Or divided between the person’s hospital care and primary care provider
- If no insurer or care provider network is selected, 100% goes to emergency care fund
Winners and Losers
Coverage for All will not significantly change the overall amount we spend on healthcare, however any policy change creates winners and losers. For most participants, Coverage for All won’t change how much is spent on their healthcare, it will just re-routes some of the money that pays for their care. Some participants in our system will likely see increases or decreases in what they are currently spending. Small businesses that don’t provide insurance will pay a little more, however they will also have access to a much wider pool of employees. People that don’t have insurance will also pay more, however they will finally have reasonable access to healthcare.
US Revenue instead of US Payroll
Taxes based on payroll have the hidden effect of encouraging businesses to replace workers with robots, or move them to contracting or the gig economy or to offshore their jobs. By based the Coverage for All tax on US revenue, every company that benefits from selling to US consumers also pays part of the cost of keeping those consumers alive.
Emergency Care
Coverage for All would establish a national Emergency Care Fund to directly fund emergency care across the country. Hospitals, urgent care centers, even individual doctors, can choose to participate in the emergency care program, with each participating facility or doctor receiving a flat fee plus additional usage compensation based on the number of emergency visits. Emergency rooms are not allowed to add additional charges for treating the people that pay into the fund. If a person does not choose an insurer or Integrated Care Network, their entire Credit is deposited in the Emergency Care fund, and paid out to the emergency care facilities that provide their healthcare.