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CCH® BENEFITS — 5/7/07

Kennedy And Dingell Introduce “Medicare For All” Legislation

from Spencer’s Benefits Reports: On April 25, Sen. Ted Kennedy (Mass.) and Rep John Dingell (Mich.) introduced companion bills in the House and Senate to provide all Americans a choice of Medicare or federal employee health care benefits.

Introduced in the Senate as S. 1218 and in the House as H.R. 2034, the “Medicare For All” bill would do the following:

1. Provide health care coverage to every American by expanding the Medicare program to the population younger than age 65.
2. Provide enrollees the option of choosing any of the health care plans offered to members of Congress, the President, and federal employees.
3. Reduce costs by administrative savings from moving to a Medicare-style financing system, by having a robust marketplace open to everyone for private plans, by bringing modern information technology to health care, by improving quality of care, and by rewarding health care providers based on performance, not just on the number of procedures performed.

According to the Urban Institute, the net additional cost of universal coverage ranges from 3% to 6% of current health care spending or about $70 billion to $138 billion, assuming no other reforms are made.

Under the proposals, there would be a significant transfer of costs from individuals and businesses that now pay for the cost of health insurance to public financing sources. Preliminary estimates of the transfer to federal spending are $600 billion per year. The cost increase to the government would be fully covered by payroll taxes and general revenues and would not add to the deficit.

A preliminary estimate of the payroll tax financing necessary would be a payment of 7% of payroll by businesses and 1.7% by workers. For comparison, businesses providing coverage today spend an average of 13% of payroll to cover their workers.

H.R. 2034 was referred to the Committee on Ways and Means and the Committees on Energy and Commerce and Oversight and Government Reform. S. 1218 was referred to the Committee on Finance.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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