How It Will Work: A Look at Key Details

President Clinton’s health care reform plan still promises a comprehensive package of benefits to all Americans, but numerous revisions in the proposal have altered many of the details. Here are answers to some of the most common questions about the latest version of the plan.

Question--What would coverage cost the average American?

Answer--According to the Administration’s revised estimates, based on 1994 prices, the total premiums for average-priced coverage would be $4,360 for a two-parent family with children, $3,893 for a single-parent family, $3,865 for a couple and $1,932 for a single person. But each family or single individual would be required to pay no more than 20% of the premium, and no one would be asked to pay more than 3.9% of his annual income.

The average premium payment would amount to $73 per month for a two-parent family with children, $65 a month for a single-parent family, $64 a month for a couple and $32 a month for a single person. In addition, there would be some deductibles and co-payments at the time of treatment, depending on the type of coverage you select. No deductible would exceed $200 a year for an individual and $400 for a family.

*

Q.--What would my employer pay toward my health care coverage?

A.--All employers would be required to pay at least 80% of the average worker’s premium. But employers could choose to pay as much as 100%. The Administration estimates that the annual cost to the employer, based on 1994 prices, would be $2,479 for any family with children, $2,125 for a couple without children and $1,546 for a single person. No business would be required to pay more than 7.9% of payroll for health insurance. Low-wage businesses with 75 or fewer employees would receive substantial government-subsidized discounts, depending on the size of the company and the average wage.

*

Q.--What would not be covered by the basic benefits package?

A.--Anything deemed by a doctor to be medically unnecessary--private hospital rooms, adult eyeglasses and contact lenses, hearing aids and cosmetic surgery--would not be covered by the basic package. Initially, it also would not cover preventive dental care for adults or orthodontics. But those benefits would be phased in by the year 2001. Mental health and substance abuse benefits, which are limited at first, also would be expanded by the year 2001. Nothing would prevent Americans from buying these services themselves or purchasing supplemental insurance to cover them.

*

Q.--What impact would this proposal have on Medicare recipients?

A.--Current Medicare benefits would be maintained for people over 65. Beginning in 1996, a new home- and community-based care program would permit older Americans with severe disabilities to receive subsidized care at home, rather than going to a nursing home. Medicare recipients also would receive a new prescription drug benefit with a $250 annual individual deductible. Premiums for Part B insurance, which covers physician and outpatient services, would increase about $11 a month to finance 25% of the cost of the new drug benefit.

*

Q.--How would the program treat workers who retire before age 65?

A.--Workers who retire between the ages of 55 and 64 would be eligible for discounts based on income. No matter what their income, they would be required to pay no more than 20% of the premium. Employers who wish to help pay any or all of the retired employee’s share of the cost of health insurance coverage would be permitted to do so. During the first three years, employers who save money because of this new benefit for early retirees would be required to return half of their savings to the government.

*

Q.--How would the program affect part-time workers, self-employed workers and two-wage earner families?

A.--Part-time workers would pay 20% of the average premium in their area if they enroll in an average-priced plan; their employers would pay a pro-rated share based on hours worked by the employee, and government subsidies would be available to those with low incomes. Self-employed workers, who now get a tax deduction for 25% of the cost of their health care, would be permitted to deduct 100% and would be eligible for discounts if their income is low. Two-wage earner families would pay their share of the premium only once but both of their employers would be required to pay the same amount that they would pay for similar workers.

*

Q.--What impact would the program have on current Medicaid beneficiaries?

A.--Like all other Americans under age 65, Medicaid recipients would choose their coverage from the list of plans available through the regional health alliance. They could choose any plan at or under the average premium without making any additional payment. Those whose income is below 150% of the official poverty level would receive subsidies for co-payments and deductibles. Supplemental services such as transportation to the doctor and vision care would continue to be available to those who are eligible.

*

Q.--Would the program create a big, new bureaucracy?

A.--The Administration recently has scaled back on the regulatory powers of the proposed new government agencies--the regional health care alliances and the National Health Board. Clinton has stipulated that alliances could not reject qualified health plans from participating in the system unless their premiums exceed the average by more than 20%, nor could they limit the number of fee-for-service plans offered in the area. Once envisioned as an independent operating agency, the National Health Board now is being viewed as little more than an executive branch advisory committee.

*

Q.--When would this plan go into effect?

A.--The Administration assumes that the system would be in place in many states by 1996, but it would not be available everywhere until the end of 1997.