Mayo Clinic Proposal on Market-Based
Universal Health Insurance Coverage

June 5, 2003 Statement

Mayo Clinic recognizes that national health policy reforms are necessary to deal with problems of cost, access, and quality in the health care system. Mayo has previously endorsed a series of health policy principles and has supported patient-centered Medicare reform. A broader set of reforms should be considered to deal with universal health insurance coverage through a market-based model. Reforms are necessary to provide coverage for the increasing number of uninsured, and to establish a market-based system in which reimbursement to providers is adequate to ensure high quality and innovation, while also providing incentives for efficiency. Many aspects of our proposed model are based on the Federal Employees Health Benefits Plan, which provides private health insurance to federal employees through a market-based system of choice and competition among insurance plans.

Principles:

1. Everyone must have health insurance that includes a basic benefit package. This is a matter of individual responsibility, and analogous to requirements for individuals to have automobile insurance. The basic benefit package should be set in a manner similar to the process now used under the Federal Employees Health Benefits Plan, to assure innovation and flexibility in benefit design. Reimbursement would be a matter to be negotiated among plans and providers, without government price controls.

2. Everyone should have a choice from among multiple insurance offerings, as long as they meet the minimum package requirement. They are free to purchase coverage that exceeds the minimum.

3. The federal government should coordinate the offering of a menu of options from private insurers, analogous to the Federal Employees Health Benefits Plan. The process should include risk adjustment, reinsurance, or other mechanisms to assure that everyone can participate in the process.

4. Government financial assistance to purchase the insurance will be made available to those whom the government determines ought to have it. Financial assistance can be in the form of vouchers, tax credits, direct payment, or otherwise, but there would not be a government-run program. Financial assistance could be based on income, age, disability, or any other criteria the government chooses. There would no longer be a separate Medicare or Medicaid program. A transition period may be necessary to avoid disruption for current beneficiaries.

5. Employers would remain free to pay all or part of the health insurance costs for employees and their dependents. Employees could use the employer payments to cover all or part of the cost for any insurance plan on the national menu.

6. Insurers should have a financial stake in funding and supporting prevention and treatment of chronic conditions.

7. The government should maintain financial support for such societal benefits as medical research and medical education. An all-payer mechanism for funding graduate medical education should be established.

8. Long-term care currently included in Medicaid could be dealt with separately by the government, outside of this model.