Healthcare Reform and the Presidential Candidates

Dear Laura,

I listened to the Healthcare Reform show this evening with great interest. Unfortunately, I was taking care of patients during the live feed.

I am a member of "Physician Voices for the Uninsured" and have been involved with helping to craft the AMA proposal for health system reform for 10 years; the last 5 years as a member of the 10-physician AMA Council that has researched and written the white papers that have helped to "flesh-out" the proposal’s details.

I was disappointed (but understand) that there was confusion about several terms used by your guests. (Specifically, universal access, universal coverage and most importantly, the term "tax credit.")

Universal access and universal coverage are not synonymous with exclusive to “single payer” health systems. In fact, our market-based health proposal will provide universal access and universal coverage to all Americans.

There are many kinds of tax credits. What is critical to understand is that the definition of "tax credit" in the AMA proposal is quite different than your guest's response would indicate.

The AMA proposal sees tax credits as the preferred method to fund the purchase of health insurance. Our proposal calls for "advanceable, refundable tax credits inversely proportional to income and adequate to purchase a health insurance policy." This means that IF an individual has NO income and does not even have to file a tax return, that they would still be given a "tax credit" (or voucher) at the beginning of the year that they could use to purchase the health care policy of their choice and with no out-of-pocket cost to that individual or family. Our proposal is predicated on the voucher being adequate to purchase a good policy. We would not accept anything less because we realize that these low income individual and families cannot afford to pay ANYTHING out-of-pocket.

Our plan also calls for those who might earn very little income but who still have some tax liability or for those with slightly more income to receive a voucher (= our version of tax credit) to purchase a plan of their choice. These plans would be owned by the individuals and would be portable (allowing the person to change jobs if they wanted to do so.) As the individuals income levels rise, the amount of the tac credit (voucher) would become a percentage of the total cost for the policy (ex: 75%, 50% or 25% of the total cost; therefore the language "inversely proportional to income). We have not tried to define exact income & percentage-of-policy-cost numbers (preferring to allow the public discussion to help define those targets). One could, for example, use income levels, expressed as percentages of the Federal Poverty Level, as benchmarks to determine the amount of any "tax credit" or voucher. These concepts are crucial to our definition: "advanceable, refundable tax credits inversely proportional to income and adequate to purchase a health insurance policy."

Currently, Congress and all Federal employees have a multitude of plan choices (approx 30-40) for their health insurance through the Federal Employee Health Benefit Plan (FEHBP). We see no reason why ALL Americans should not have similar choices/opportunities. Members of Congress do not receive Medicare at age 65; they have the FEHBP. Rather than “Medicare for All,” why not “Individually-owned, Portable Health Insurance of One’s Choice” for all?

The US currently has a REGRESSIVE tax system because employers have the ability to deduct the cost of health insurance premiums whereas individuals do not. Our proposal would help to correct that inequity by allowing those who purchase their own insurance to take a tax deduction in the amount of their own out-of-pocket expenses, even if they get some help from the government through the advanceable, refundable tax credit system.

Additionally, our proposal also says that we believe that anyone earning 500% of Federal Poverty Level (approx $120,000 per year for a family of 4) has a responsibility to purchase health insurance. We have suggested one way to make that happen MIGHT be to link the standard imdividual Federal tax deduction to proof-of-insurance. Those in the HIGHER income categories who choose not to purchase a health insurance plan might lose that standard deduction. This would push everyone to contribute into the insurance pool (thereby spreading the risk and lowering premiums for all plans). If the HIGHER income individuals or families chose not purchase insurance, then the US Treasury would have additional funds (generated by excluding the standard deduction) to provide subsidies to those who need the help.

Our proposal has provisions to protect those who are "uninsurable" and it has mechanisms to provide a safety net for them.

There is not room (or time) to detail every aspect of the proposal but there are MANY more. What I can say is that I believe that this proposal is well thought out, flexible and modular.

As one looks at other countries, one must understand that their systems have many flaws (Canada does not cover drugs; patient pay for them out-of-pocket; there are long lines and delay in routine care); England rations care (if one is 65-years old, one is NOT even eligible for a kidney transplant and one is NOT admitted to the ICU for a heart attack). This is simply NOT the kind of care that Americans will accept. The Swiss use a system VERY SIMILAR to the proposal our physician group is supporting. They have universal access and universal coverage with a market-based system.

In my role on the AMA Council, I have had the opportunity to meet personally with leaders of the Kaiser Family Foundation, the head of the FEHBP and many other national leaders in health care policy. I would welcome the opportunity to meet with you for 30 minutes or so to give you additional information about our groups’ proposal and answer any questions you might have.

Thank you, as always, for your thoughtful approach to these challenging issues!

Respectfully,

Georgia A. Tuttle, MD