Central Valley Health Policy Institute
CAUSE: Years 1-5
In this first phase a new national basic care system for children is established, adults 19–64 will have the option to purchase public primary and preventive care coverage, and the Medicare program for the aged and disabled is updated. Important reforms made to promote healthy behaviors, make private insurance more affordable, increase the use of evidence-based care, and improve the capacity of health systems to deliver needed care.
Children Aged 0-18:
Beginning in 2010, during the first five years of implementation, children 0-18 will be covered by CAUSE, an approach modeled on Part A and Part B of the current Medicare system. CAUSE will be used as a foundation that will provide all children with basic coverage for health care. There will be income-adjusted premiums. Families can continue with private insurance plans if they offer comparable benefits. There will be an option to purchase additional coverage in the form of private wraparound plans for deductibles and co-pays. There will also be the option to purchase a private supplemental plan for benefits and services not included in the basic CAUSE plan. This will ensure health care for every child, but it will preserve the choice of coverage that the U.S. already enjoys. CAUSE will also maintain the quality of an individualized patient/doctor experience and still not exclude those in the U.S. who truly cannot afford health care for their children.
To encourage the continued purchasing of high-quality, individualized, private plans, incentives will be enacted for private citizens and corporations. Parents who purchase private insurance may deduct the CAUSE costs for qualifying plans. Large firms employing more than 200 employees will receive tax deductions if they offer qualifying plans to employees’ children while small firms employing less than 200 employees will receive tax credits if they offer qualifying plans to employees’ children. Eligibility for CAUSE will be determined through tax returns and for those who do not file taxes, annual eligibility determination will be made by state Medicaid programs. A national minimum eligibility for Medicaid will be at 150 percent of Federal Poverty Level (FPL).
CAUSE deductibles and long-term care for beneficiaries ages 0-18 will be paid by individuals through private wraparound plans or by Medicaid. All services will be funded through a financial transaction tax and maintenance of current funding, and increased taxes on tobacco products. Respective national, state and sub-state elected health boards will help create the standards for the CAUSE coverage so that the plans will encompass the needs of the individuals and specific populations within states and sub-state regions. This will help states and sub-state regions to maintain personalized coverage for the unique needs of people in their communities. The newly established health boards will also certify private plans as alternatives to CAUSE coverage. Funding levels for specific health boards will consider both population and health system features, so that regions with health care access and quality challenges have the opportunity to invest in system improvements. The Federal Medical Assistance Program (FMAP) will be changed to provide increased federal funding to large sub-state areas with populations of more than 500,000 people that are poorer than their state averages. This would directly enhance the access to and quality of care. Medicaid payment rates to providers and hospitals will be equal to those of the CAUSE plan.
Adults Ages 19-64:
Individuals ages 19-64 will have an option to buy into what is currently Medicare Part B, with an emphasis on outpatient, primary care, and preventive services. It will provide an affordable health care alternative without strangling the private insurance market or interrupting health care coverage that some people prefer. Inpatient services, which are currently a part of Medicare Part A, will remain with private insurers. These plans will be purchased separately from outpatient services and will be coverage for catastrophic care. The quality of care provided currently will not be lowered, but there will still be basic core coverage for primary and preventive services at affordable costs for everyone in this age group. Medicaid will remain as currently designed for persons ages 19 and older.
Primary and preventive services, most outpatient medical services, outpatient mental health/substance abuse services, medications, and equipment and supplies will be included in Part B as determined by individual state and sub-state health boards. The CAUSE deductibles associated with each of the aforementioned services will be determined by the respective health boards to ensure fairness to providers, while maintaining the quality and affordability of services.
Lastly, the ceiling on post-graduate residency training slots for medical students will be lifted to increase the number of board certified physicians able to care for patients. This will guarantee greater numbers of doctors in any given medical facility, increasing the amount of patients able to been seen by a physician and the amount of time and care given to each patient. This will also help provide every individual with a primary care physician, cutting back on chronic disease and high long-term care costs. The quality of care given to both CAUSE holders and private insurance holders would potentially increase.
Specific to People Ages 65 and Above:
Medicare beneficiaries currently consist of individuals ages 65 and older, people with end stage renal disease, and people classified as disabled through the Social Security Administration. Under the CAUSE approach these persons will be provided the current Medicare coverage and cost-sharing structure, but coverage may be modified based on recommendations of the national health board. Under CAUSE, Medicare Part D will be absorbed by what is now Medicare Part B; Medicare Part B will in turn be redesigned to include the vital aspects of Medicare Part D in a more efficient and effective way. CAUSE will eliminate Medicare Part C completely. Services from Medicare parts A and B may be reimbursed on a fee-for-service basis or through qualifying managed care plans. Reimbursement to managed care plans will be on a case-mix adjusted basis that will be based on the medical complexity of patient population, but cannot exceed 95 percent of a new Average Annual Per Capita Cost (AAPCC) covering all of CAUSE.
CAUSE: Years 6-10
In this phase the new national basic care system for children gets more intensive cost control while adults 19-64 will get Part II basic outpatient, primary, and preventive care with the option to purchase Part I coverage at full cost. This will cause private supplement markets to further expand.
The plan will remain the same for children ages 0-18, but covered services may be modified based on recommendations from the national health board.
Individuals ages 19-64 will all become beneficiaries of what is currently Medicare Part B, with the option to purchase private coverage for hospital and catastrophic care. Individuals will pay income-adjusted premiums. There will be a variable deductible based on the value of services in promoting health, and the national health board’s research findings will modify coverage for services. Employers and individuals will still have the option to buy into a public plan modeled after the current Medicare Part A (inpatient care).
Specific to individuals 65 and older, CAUSE will remain in the year 1-5 phase of plan implementation.
State and sub-state boards will receive a budget based on the cost information for children ages 0-18, as related to CAUSE, for years 2010-2015. State boards will work within a budget that has been adjusted for population and health care costs. The national health board will negotiate rates and contracts with providers and health care systems. Most plan elements from years 1-5 will remain the same; the administrative modifications to the current Medicare system, the insurance market reforms, and the modifications to promote health remain intact.
CAUSE: Years 11-15
In this phase there is further cost control and quality improvement to CAUSE. Persons 60 and older receive CAUSE Part I and Part II with option to purchase supplemental private coverage.
For individuals ages 0-18, the plan will remain the same as in years 6-10. Covered services may be modified based on recommendations from the national health board.
All individuals ages 19-59 will remain beneficiaries of what is currently Medicare Part B. The option to buy into what is currently Medicare Part A will be the same as for those 19-64 in years 6-10 of plan implementation.
Everyone over the age of 60 will become beneficiaries of CAUSE, covered by what are currently Medicare Part A and B. The option to purchase private coverage is still available.
CAUSE: Beyond 15 Years
All U.S. residents are enrolled in CAUSE Part I and Part II. All U.S. residents continue to have the option to purchase private supplemental plans.
After 15 years the CAUSE approach will be completely implemented. Specific benefits and deductibles associated with covered services will be determined by the national health board.
As in the previous years of CAUSE, private wraparound plans may be purchased to cover deductibles and out-of-pocket costs for services covered by CAUSE and individuals wanting more than the covered services in the basic plan will be able to buy supplemental coverage through private insurance companies. CAUSE private supplemental plans would still not be able to deny coverage to individuals due to health status. Individuals who want more covered services than those available in the basic plan will be able to purchase a secondary policy from private insurers. This would not be governmentally financed or subsidized. Individuals or firms offering supplemental coverage will not receive tax deductions.
The CAUSE approach will financially cover services determined by the national health board to be successful, after receiving input from state and sub-state regional health boards. These would be services that are found to be optimal for the nation’s health, based on the principles of evidence-based medicine. Covered services for the basic plan will be determined by the national health board, following recommendations by the NIH, research analysts, and all of the public input of the regional boards.
These services would include inpatient care, prescription drugs, primary prevention, outpatient care, mental health, vision, hearing services, dental care, emergency care, long-term care separating the medical component from the medical services only to encourage in-home care, physical therapy, occupational therapy, and hospice care. Only the healthcare components of long-term care (and not the so-called “hotel” component) will be covered by CAUSE.
Individuals will be able to rely on private long-term care insurance or Medicaid for these components of long-term care. Not everything in the above services will necessarily be included in the basic plan. It is important that the covered services need to be recognized as medically necessary so as to not undercut basic health care access. In year 15, there will not be cost-sharing for items in which evidence-based medicine has shown cost-saving and benefit to both patient and society so that there is no barrier to obtain the service. There will be cost-sharing for other items not shown to be cost-saving but that are necessary to avoid overutilization of the system.
Medicaid eligibility will be established by states, but minimum eligibility will be at 150 percent of the FPL. Medicaid will pay premiums, deductibles, long-term care hotel component, and additional chronic care benefits as in many current state plans. States will not be able to establish reimbursement rates that are lower than the CAUSE approach. The CAUSE approach will continue to contract with private intermediaries to help process claims and help with diverse managed care and special population plans.