Promises of universal health care roll off the tongues of several presidential candidates but how do they plan to achieve it? Dr. Ezekiel Emanuel, Director of the Clinical Bioethics Department at the U.S. National Institutes of Health, says he's got the solution, in the form of an innovative and crowd-pleasing voucher plan.
"I think the universal part appeals to the Democrats. The voucher part appeals to Republicans. And I think it should make us one big happy family," Dr. Emanuel tells David Brancaccio in a web-exclusive interview.
Transcript: Dr. Ezekiel Emanuel on Universal Health Care
DAVID BRANCACCIO: Dr. Emanuel, welcome.
DR. EMANUEL: Thank you. Glad to be here.
BRANCACCIO: Zeke is ok, I can call you Zeke?
DR. EMANUEL: Absolutely.
BRANCACCIO: Alright. Well give me some of this plan now. You're not talking about Canada or Britain, where the government pays doctors—for all this. What are you proposing?
DR. EMANUEL: Our proposal is for universal healthcare vouchers. It's a plan where everybody in America gets a voucher to buy health insurance from an insurance company or health plan or a managed care organization. And they get a basic benefits package. If they want to buy more, they want—wider choice of doctors, they want better services, say, better eye glass services, or they want more mental health services, they can pay more and they can buy up.
Their employer isn't involved, so there's continuity. They stay—stay with the same plan whether they change jobs, or unfortunately get fired. The plans cannot, say, "We're going to exclude you for preexisting conditions." They have to reinsure that.
BRANCACCIO: What's in it for—'cause you still have insurance companies in this plan. You haven't eradicated insurance companies. So—what if you're decrepit, and you show up—with your little voucher. Why should they take you?
DR. EMANUEL: So every insurance company would, to participate, would be required to take the voucher. That's the first thing. The second thing is that doesn't mean that they would get paid the same amount no matter what people—what illness people have. The point you're saying is, look, some people use more healthcare resources.
And there would be a reason for the insurance company not to cover them. We take care of that by what is called risk adjustment. That is the national health board, when they give money to the insurance company to cover a person, pays extra for sicker people, and less for healthy people. That eliminates the incentive for insurance companies to skim the cream, or drop the lemons.
BRANCACCIO: Cherry pick I believe is the term these people use.
DR. EMANUEL: Or that's right. That's another one.
BRANCACCIO: Well, let's review some of the other advantages of the plan as you see it. So you wouldn't have employers doing this.
DR. EMANUEL: Absolutely.
BRANCACCIO: Which would relieve some burden on America's overburdened corporations.
DR. EMANUEL: Absolutely. I think—I think—some of the biggest supporters of this plan will be businesses. They want—their employees to have insurance, but the costs are becoming too high, too astronomical for them.
So they would get out of the game entirely. And I think that's a good thing. One of the benefits for employees would be they would probably see their wages go up. 'Cause, right now, employers—are playing whatever it is, ten, 15 percent, of—of their labor cost to health insurance. That money would be, if the economists are right, transferred as increases in wages.
BRANCACCIO: Not just a shareholder value?
DR. EMANUEL: Well, it might go to shareholder value. But, again, they're going to have to compete for workers. And it probably—I mean the economists think it would go—predominantly to—workers in—increase in wages. So that would be a benefit.
BRANCACCIO: Now if I can speak for the—two million suspicious people watching us right now, when you talk about a basic package of—
DR. EMANUEL: Right.
BRANCACCIO: —medical coverage, what are you talking about? Are you talking about—the most advanced cancer care? Or what are you talking about?
DR. EMANUEL: You would probably get the same plan you have now as a basic benefits plan. Look at what the average employer is providing to their employee today. Take that premium and multiply it times all Americans. And how much does that come out?
BRANCACCIO: I thought a component of this was an added tax. What the Europeans call value added tax, sales tax, sort of.
DR. EMANUEL: Right. Well, if the states aren't paying Medicaid anymore, and employers aren't paying for insurance, we would have to find the money to pay for this. We wouldn't add more money, but we'd—you'd have to get basically—recoup somehow how employers are paying for it and how the states are paying for Medicaid. And that would be—we've proposed to finance this by a value added tax.
That means that, when you buy something, the added value is taxed. The tax would be about eight to ten of purchases—if you eliminate food and some other items that—poor people disproportionately buy. And, again—it—you're going to have to pay for this somehow. It is going to be a tax.
BRANCACCIO: This seems a little shocking if you add the ten percent to the nine percent sales tax they're already charging in California. Nineteen percent sales tax.
DR. EMANUEL: Well, but—remember what you get for that. So—your wages should increase—because you're no longer paying—your employer is no longer paying for you health insurance, and should transfer that money to your salary increase. And there is this benefit of guaranteed healthcare. The overall—and your—by the way, your state taxes should go down if Medicaid is no longer part of the state—budget demand. So all of those things—should—we're not demanding any more money devoted to healthcare. We're just shifting how we get it.
BRANCACCIO: But still insurance companies there in the middle. They're sort of—I love insurance companies as much as the next guy. But they're kind of middle men. And there have been arguments by health—policy experts—
DR. EMANUEL: Right.
BRANCACCIO: That they're kind of noise in the system.
DR. EMANUEL: One of the things that I think is important going forward, to make healthcare more efficient, and to get continuity of coverage better—is to have vertically integrated health plans.
Where your doctor works with the hospital, works with the pharmacy. Works with the home health aid. Works with skilled nursing facilities. So that you're not sort of picking and choosing in the—in the whole system is just broken into parts.
That does require someone to vertically integrate health plans, health insurance companies. Where we would change from the current system—is the following. Right now in America there are about 1,300 health insurance companies. Many of them very small niche players. They cater to very small companies, but they add a lot of administrative costs —in the sense of they've got a different billing system. And so people have to keep up with that. In our plan, we would estimate that we would cut that down to about 50 or 60 plans throughout the country.
BRANCACCIO: You'd also get rid of those insurance companies, and there are some, who only like to insure people who will never get sick.
DR. EMANUEL: Absolutely. You can—in—again, in this proposal you'd have to take whoever walks through the door.
BRANCACCIO: Is it not troublesome to you that, under your plan, a wealthy person could buy some really "souped" up coverage that a poorer person could not get access to. There'd be this basic inequality.
DR. EMANUEL: You don't think that happens now? From a practical standpoint, the rich can always buy. It seems to me the ethical question, the question of justice, is are people getting a good basic benefits package? And is—the—is everyone getting that?
It is not required, I don't think, from an ethical standpoint, from a matter of justice, for that government to provide everything that could possibly be—be done for everybody in the country. We would go bankrupt.
BRANCACCIO: You think Republicans and Democrats could embrace a voucher plan? Of the sort that you're discussing?
DR. EMANUEL: I think so. And I'll say why. I think for the Democrats—the universality. The fact that everyone's in the system. Everyone gets the same basic benefits package, is appealing
I think Republicans, I think what they want to be sure is, it's not a—big government entitlement with no—with unlimited—budgets like Medicare. They want to make sure that Americans get choice. That we retain a private delivery system.
We have all of those in the voucher program. So I think the universal part appeals to the Democrats. The voucher part appeals to Republicans. And I think it should make us one big happy family. And we should just pass it.
BRANCACCIO: Well, Zeke, Dr. Emanuel, thank you very much.
DR. EMANUEL: It's been a great pleasure to be here.
BRANCACCIO: Ezekiel Emanuel is a bio-ethicist at the National Institutes of Health.