AMERICARE HEALTH CARE ACT OF 2007

Questions and Answers

How do AmeriCare and Medicaid interact?
Medicaid would continue to cover long-term care and home and community-based services, while acute care and medical services would be provided through AmeriCare. AmeriCare provides no or limited cost-sharing for low-income individuals/families and streamlined eligibility procedures.

How does AmeriCare affect Medicare?
Medicare’s administration and benefits are improved to conform with AmeriCare.

Will people with disabilities be eligible for AmeriCare? If so, how will their benefits change?
People with disabilities would continue to receive long-term care and community-based services through Medicaid, while their acute care, medical care services, mental health, and substance abuse services would be provided through AmeriCare. Unlike Medicaid, AmeriCare benefits would not vary from state to state. People with disabilities who are eligible for Medicare would continue to receive services through that program, with improved benefits and cost-sharing.

Why didn’t you include home and community-based care, like the Kennedy-Dingell bill?
Home and community-based care is best provided at the local level, where it can be tailored to individual needs. Because states have more experience with home and community-based care, they are better equipped to develop comprehensive programs for these services.

Will my employer be able to provide me with additional benefits? Will I be able to buy additional benefits?
Yes. Employers and private insurance companies may continue to offer supplemental benefits.

What is the cost of AmeriCare?
The Congressional Budget Office has not provided an official “score” for AmeriCare. However, in order to fairly evaluate the cost of AmeriCare, we need to consider the cost of the current, fractured system.

The U.S. loses between $60 billion and $130 billion in productivity annually because so many Americans do not have health insurance coverage. The economic vitality of the country is diminished by productivity lost as a result of the poorer health and premature death or disability of uninsured workers. Medicare, Social Security Disability, and the criminal justice system likely cost more than they would if everyone had health insurance coverage. Eliminating the fragmentation that exists today and assuring that everyone in the U.S. has health insurance will result in considerable savings to the system overall.

Building on the existing infrastructure of Medicare will keep AmeriCare’s, program costs low. Medicare has consistently out-performed both private insurance and the Federal Employees’ Health Benefits Program in containing costs: Medicare’s administrative costs are only 2% compared to 15% to 30% in the private sector. Additional savings will be achieved by requiring the Secretary of HHS to negotiate with pharmaceutical manufacturers for discounts on prescription drugs and requiring the use of health information technology in clinical practice.

Will AmeriCare premiums be affordable?
Health insurance premiums for families who have insurance through their private employers were, on average, $922 higher in 2005 due to the cost of health care for the uninsured; premiums for individual coverage were an extra $341. By assuring that everyone has health insurance, premiums will be lower overall. Furthermore, saving on administrative costs by building on the existing infrastructure in Medicare, using AmeriCare’s purchasing clout to obtain discounts on prescription drugs, and achieving greater efficiencies and higher quality through the use of health information technology is likely to mean that AmeriCare’s premiums will be lower than the average cost of employer-sponsored coverage today.

In 2006, average total premiums for employer-sponsored coverage were $4,242 for individual coverage and $11,480 for family coverage.

Under AmeriCare, individuals who earn less than $20,000 and families who earn less than $40,000 pay no premiums or cost sharing. Individuals who earn less than $30,000 and families who earn less than $60,000 pay reduced premiums. Above these income levels, employees pay 20% of the AmeriCare premium unless they are covered under their equivalent employer plan. Self-employed individuals and people outside of the workforce with income in excess of the subsidy levels pay the full AmeriCare premium. The deduction for medical expenses that exceed 7.5% of income still applies.

Does everyone have to be covered? What happens if you’re not covered?
Under AmeriCare, everyone pays their fair share of the cost of health insurance. Premiums are collected during the annual tax filing. People who receive coverage through their employer do not pay AmeriCare premiums. Providers will enroll people in AmeriCare in order to receive reimbursement, as they do today under other public programs.

How do physicians, hospitals, and other providers get paid?
Providers are paid the same way they are paid through Medicare today. The Secretary of HHS will establish additional payment mechanisms for services that were not previously covered under Medicare (such as maternity care).

Is there a late penalty for enrollment in AmeriCare? If you get coverage through your employer, can you switch to AmeriCare at a later date?
Anyone who is eligible can enroll in AmeriCare at any time without penalty. Premiums will be paid at the annual tax filing. Credit for employer contributions made during the year will be applied.

Does AmeriCare replace veterans’ benefits?
The Veteran’s Administration Health System is unchanged by AmeriCare. The Secretary of HHS is required to submit a report to Congress on the feasibility and desirability of making federal health insurance programs more uniform.

Do you include cost containment measures?
Since the program began, Medicare’s cost growth has been consistently lower than both private plans and the Federal Employees Health Benefits Program. By utilizing Medicare’s program infrastructure, AmeriCare will achieve the same success. Furthermore, using AmeriCare’s purchasing clout, the Secretary of HHS will be able to negotiate discounted prices for prescription drugs. Expanding the use of information technology in clinical practice will deliver additional administrative efficiencies and quality improvements.

Why did you decide to maintain employer coverage?
One-hundred and sixty million people – nearly three out of five people under age 65 – receive health coverage through their employer. Rather than disrupt this stable source of insurance coverage, AmeriCare augments existing coverage by providing an affordable plan for those who are not covered by their employer.