Foundation offers plan to widen health coverage

By Kim Dixon

WASHINGTON (Reuters) - A requirement that all companies help fund health insurance in the United States and a new public plan option are keys to a plan proposed on Tuesday to dramatically shrink the rolls of the uninsured.

The proposal from the Commonwealth Fund, a private foundation, published in the May/June issue of the journal Health Affairs, is the latest plan aimed at cutting a growing number of uninsured people in the United States, now estimated at 47 million.

Building on the current employer-based system, which finances health care for about 160 million Americans, it proposes a government body to sell lower-priced health plans to small business and individuals.

It would achieve near universal coverage, leaving about 3.6 million without insurance, according to an estimate by the Lewin Group, a consulting firm for governments and private industry.

"The U.S. is the only industrialized country that doesn't cover everyone," Commonwealth Fund president Karen Davis said, noting a opportunity for change when a new president takes office in 2009. "It's there to inform the debate in the presidential election."

Escalating costs and limited access to quality medical care in the U.S. are among the top domestic health issues cited by voters in national polls ahead of the November presidential election.

Out-of-control spending is the key driver. Medical spending has tripled over the past four decades, and now comprises more than $2 trillion per year, or 16 percent, of the U.S. gross domestic product. That is expected to rise to 20 percent by 2017.

The Commonwealth plan calls for employers to provide health coverage or pay into a fund, up to 7 percent of earnings, or $1.25 per hour per worker, to raise about $45 billion.

That is not likely to sit well with employers, according to Steve Wojcik, vice president for policy at the National Business Group on Health, which represents large employers.

"We think it should continue to be voluntary," Wojcik said.

Davis said employers not currently providing health insurance, some providers not seeing patients in current public plans, and those selling individual health plans would likely see increased costs as a result of the plan.

"Each of these features certainly has elements that will give pause to some groups," Davis said. "But I think the basic bottom line is that if everyone will give a little it means you can get universal coverage."

A group of health-care payers and providers, including the big insurer Aetna Inc and drug wholesaler McKesson Corp, will release its own reform bid later Tuesday.

That plan will include revising payment systems to reward quality as opposed to volume, and increasing information about prices and quality of care.

(Editing by Jeffrey Benkoe)