Kennedy's plan for Massachusetts leads way for expanded healthcare by 2010

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Last week, Senator Edward M. Kennedy, chairman of the Senate’s Health, Education, Labor and Pensions Committee, oversaw the Committee’s first hearing of the 110th Congress and heard from healthcare policy experts on the challenges and opportunities of expanding healthcare coverage to all citizens.

“The stakes couldn’t be higher,” Kennedy said. “Too many trends in healthcare are going in the wrong direction. Insurance coverage is down. Costs are up. And America is heading to the bottom of the league of major nations in important measures of the quality of care.” Nearly 47 million Americans lack even basic coverage, and for tens of millions more, their coverage provides little help if major illness strikes, Kennedy said.

Kennedy said he believes that extending the guarantee of Medicare to all Americans is the best way to address the country’s healthcare crisis. He said he is open to all ideas and that legislators should pay close attention to the innovative solutions being tried in many states.

He cited Massachusetts’ recent move to enact a state health plan that provides health coverage for all citizens. Kennedy’s “Medicare for All” plan would make healthcare coverage available to every American by expanding the Medicare program to the under 65 population. Costs would be reduced by administrative savings from moving to a Medicare-style financing system, by bringing modern information technology to health care, by improving quality of care, and by rewarding healthcare providers based on performance, he said.

A phased-in approach will first extend coverage to individuals aged 55 to 65 and then to children under 20. Later phases would extend coverage to the rest of the population. The program would allow for full benefits as well as freedom of choice. He said the program would be largely publicly financed, but the health system itself would remain private. Just as under the current Medicare program, doctors, hospitals and other providers would continue to operate as independent, private entities. As under Medicare, the program would largely be administered by private carriers and intermediaries. Any individual with a social security number would be eligible to participate in the plan.

Kennedy said his plan would save $380 billion a year while providing quality, affordable care for all Americans. Adoption of an electronic medical record and advanced information technology would save more than $160 billion a year. The plan would be financed by a combination of payroll taxes and general revenues. He reported that a preliminary estimate of the payroll tax financing necessary will be a payment of 7 percent of payroll by businesses and 1.7 percent by workers. That represents a significant reduction of the current spending by businesses of an average of 13 percent of payroll to cover workers.