Chapter[ Detailed Plan
Section[ Ensuring Affordable Health Coverage for All
Ensuring Affordable Health Coverage for All
Americans value health care and coverage, but its cost is often prohibitive. Over half of the uninsured
in a recent survey said they couldn’t afford it.viii This is not a surprise. The average family premium for
employer-based coverage (including employer and employee contributions) is over $12,000.ix For half
of Americans, this total premium accounts for at least one-fourth of their annual income.x This helps
explain why two-thirds of the uninsured have incomes below 200 percent of the poverty limit (roughly
$40,000 per year for a family of four). The cost of insurance is a serious barrier to coverage for people
with high health care needs or limited access to job-based insurance. The premium for a person with a
health problem can, in some states, be many times higher than that of a young, healthy person. Being
young does not necessarily mean easy access to affordable coverage, however. Nearly 30 percent of
young adults are uninsured,xi and one in three young adults reported some type of medical debt
problem, with the percent climbing to 46 percent for uninsured young adults.xii Young adults are less
likely to get insurance because they are more likely to work part-year or part-time jobs which rarely
offer health benefits (23 percent of part-time workers are uninsured).xiii Women also have higher
health needs but lower incidence of paid work that offers insurance.xiv The problem of affordability of
insurance also contributes to racial disparities in health outcomes. The uninsured rate for African
Americans is one third higher and that of Hispanics is over twice the uninsured rate for white
Americans.xv Lack of access to health care due to lack of coverage, even for a short period of time, can
lead to worse health outcomes and financial insecurity.
The American Health Choices Plan will make health insurance more affordable for the millions of
Americans who want it. It includes a number of straightforward policies to achieve this end:
1) Ensuring Premium Affordability Through Refundable Tax Credits: Premiums have
skyrocketed over the last several years – nearly double since 2000. The American Health
Choices Plan helps working families afford coverage through refundable, income-related
tax credits to ensure that accessible, high-quality health coverage is affordable to all.
2) Limiting Premium Payments to a Percentage of Income: This credit will ensure that
securing quality health care is never a crushing burden for any working family. This
guarantee will be achieved through a premium affordability tax credit that ensures that
health premiums never rise above a certain percentage of family income. The tax credit will
be indexed over time, and designed to maintain consumer price consciousness in
choosing health plans, even for those who reach the percentage of income limit.
3) Promoting Shared Responsibility for Large Employers: Hillary Clinton’s comprehensive
agenda to lower costs and improve quality will substantially lower costs for employers,
making it easier for all firms to continue coverage or offer new health benefits to their
workers. In return, large employers will be expected to provide health insurance to their
employees or make some contribution to the cost of coverage. This responsibility will take
into account firms’ size and average wages.
4) Creating Small Business Tax Credit: Small businesses are engines of job growth in our
economy. They account for 80 percent of net new jobs since 1990xvi and create jobs that
stay here in America. Yet, they also face the most acute challenges to providing health care
for their employees. Small businesses face higher premiums due to limited purchasing
power and tend to employ lower-income workers.xvii As a result, small employers cover far
fewer of their employees – and the proportion that offers coverage in the first place is less
than half that of large firms that offer health insurance. Coverage among small employers
is eroding. Since 2000, the share of these small firms offering coverage has fallen from 57
percent to 45 percent.xviii At a time when health care costs are increasingly undermining
the economic competitiveness of American business, Hillary Clinton’s plan seeks to make it
easier — not harder — for small businesses to create new jobs with health care for workers
here in the U.S. Specifically, small businesses that provide quality coverage (e.g., benefits
like what Members of Congress receive) and contribute most of the premiums for their
workers would qualify for a refundable tax credit. The tax credit could be structured as a
traditional policy (e.g., a credit equal to 50 percent of premiums for firms with fewer than
25 employees and less for medium-size employers). As President, Hillary Clinton would
work with the small business community and Congress to design the parameters of the
credit (e.g., protecting against subsidizing boutique high-income firms) as well as how the
credit might dovetail with the tax credit going to individuals and families to make
premiums affordable.
5) Strengthening Medicaid and the State Children’s Health Insurance Program to Serve
All Low-Income Individuals: These programs serve over 55 million Americans, and have
done so successfully through federal-state and private-public collaborations. The holes in
this safety net (e.g., lack of coverage of poor, childless adults) will be fixed to ensure that
the most vulnerable populations receive affordable, quality care. Similarly, the other part
of the safety net, like public hospitals and community health centers, will continue to
receive support to serve vulnerable populations.
6) Creating a Retiree Health Legacy Initiative: For major American employers with
workforces that face unusually high health care costs due to a high ratio of retirees, health
care costs can be a drag on competitiveness and job creation – particularly for our major
manufacturers. The American Health Choices Plan will provide a tax credit for qualifying
private and public retiree health plans to offset a significant portion of catastrophic
expenditures that exceed a certain threshold. Such reinsurance would be time-limited to
reflect the short-term demographic need of the aging baby boomers, and would be
devised in a manner that does not add to our long-term fiscal challenges. The policy will be
designed to make companies more competitive and assist workers – and not to take
pressure off the need for strong managerial leadership at the top. Participating companies
would also have to demonstrate that they are employing best health practices, including
chronic care management, information technology, and other modernization initiatives
that maximize value, quality, and accountability. Finally, employers will also have the
option of buying early retirees into the new Health Choices Menu.
________________________________________________________________________________________________
viii. CBS News / New York Times. (March 1, 2007). “U.S. Health Care Politics,” available at: http://www.cbsnews.com/htdocs/CBSNews_polls/health_care.pdf
ix. Kaiser Family Foundation / Hospital Research and Educational Trust. (2007). Employer Health Benefit Survey: 2007. Menlo Park, CA: Kaiser Family Foundation.
x. U.S. Census Bureau. (2007). Income, Poverty, and Health Insurance Coverage in the United States: 2006. Washington, DC: U.S. Department of Commerce.
Median income in 2006 was $48,201.
xi. U.S. Census Bureau. (2007). Income, Poverty, and Health Insurance Coverage in the United States: 2006. Washington, DC: U.S. Department of Commerce.
xii. S.R. Collins, C. Schoen, J.L. Kriss, M.M. Doty, and B. Mahato. (August 2007). Rite of Passage? Why Young Adults Become Uninsured and How New Policies
Can Help. New York: The Commonwealth Fund.
xiii. U.S. Census Bureau. (2007). Income, Poverty, and Health Insurance Coverage in the United States: 2006. Washington, DC: U.S. Department of Commerce.
xiv. E. Patchias and J. Waxman. (April 2007). Women and Health Coverage: The Affordability Gap. New York: The Commonwealth Fund.
xv. U.S. Census Bureau. (2007). Income, Poverty, and Health Insurance Coverage in the United States: 2006. Washington, DC: U.S. Department of Commerce.
xvi. Kelly Edmiston, Federal Reserve Bank of Kansas City, 2007.
xvii. Len Burman, “Taking a Checkup on the Nation’s Health Care Tax Policy: a Prognosis,” Testimony to the Senate Committee on Finance, March 8, 2006.
xviii. Kaiser Family Foundation / Hospital Research and Educational Trust. (2007). Employer Health Benefit Survey: 2007. Menlo Park, CA: Kaiser Family
Foundation.
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