While it is good to see a proposal for a Medicare-like plan that individuals and familes can buy into, I don't understand why you make it so complicated.  According to your linked document:

Health Care for America has just three central elements: 

• the new Health Care for America Plan, which would be open to any legal U.S. resident without good workplace coverage;3 

• a requirement that employers (and the self-employed) either purchase coverage comparable to Health Care for America for all their workers or pay a relatively modest payroll contribution (6% of payroll) to fund Health Care for America coverage for all their employees; 

• a requirement that Americans who remain without insurance take responsibility for their and their families’ health by purchasing private coverage or buying into the Health Care for America Plan

If you are going to require that everyone have insurance, why not just cover everyone under the one plan and let individuals and employers buy additional private insurance if they can and want to?  That's where your program will evolve to anyway.  Why begin with confusion?

Does this address your question? These are excerpts from Jacob Hacker's Health Care for America briefing paper:

The Health Care for America proposal promises to restrain costs not just because it creates a large public insurance pool. The structure of the proposal also ensures that the sector best able to control costs is rewarded with additional patients over time.

Because employers covering approximately half of workers would continue to provide private insurance, employers and insurers would be free to experiment with their own cost-control strategies, so long as these strategies did not involve cutting benefits or shifting more costs onto workers.

And if employers and insurers effectively held down costs, then private insurance would become increasingly attractive in comparison with the Health Care for America Plan. If, by contrast, private premiums were not kept in line, an increasing share of employers would enroll their workers in the Health Care for America Plan.

Thus, rather than a constant tug of war, Health Care for America would create a constructive public–private dynamic that would reward the sector best able to control costs—and without holding the health security of ordinary Americans in the balance.

Emma

I work for EPI and obviously have a stake in this, but, i think you're over-estimating the complexity faced by people if this plan is adopted. You seem to think it's a problem that small firms that struggle now to provide insurance will choose the public plan while large employers will keep providing insurance on their own - it's not, in fact, it's the whole point.

essentially, employers will make a simple decision as to whether it's cheaper for them to pay the 6% payroll levy or provide insurance on their own for their workforce. If the former, they pay and their employees are enrolled in the public plan, if the latter, their employees keep the coverage they've already got.

there's are a couple of advantages to this - substantive and political. The substantive advantage is that it allows competition between private and public provision of insurance (bounded by the requirement that all insurance meet a minimum standard of comprehensiveness of care) to dictate where coverage will be taken up. If private coverage proves leaner and more efficient, more and more firms will provide on their own. If the public plan is more efficient than more firms will have their employees rolled in it. I have my own guess as to where efficiencies will be (the public plan), but, anybody who can tell you w/ certainty what will happen w/ the future of health care is showing an awful lot of hubris.

The political advantage is that those who have good, affordable insurance right now will see no change in how it's delivered. There is a subset of American firms (generally large and high-wage) who actually do a good job in providing insurance. It seems like good politics to let them keep doing it.

Lastly, and, also political, allowing firms who are currently providing coverage to keep doing it keeps the tab down for new government money needed to expand coverage.

joshb

Thank you for bringing this up.  If GOVERNMENT were to TAX people and put the money in the financial markets to the same degree:

1. There would be a fear of socialism in that government would have such a huge stake in the capital economy (shh, don't mention government pention plans).  And,

2. People would be OUTRAGED that the taxes were taken so far in advance of their need for cash outlays.

The health insurance companies have SOMEONE's money in the capital markets, It isn't "their" money (well, it is, now).  The money originated in essentially a fiduciary trust to guarantee the future payment of benefits.

HEALTH INSURANCE is NOT insurance.  It is TAXES in privatized form.  My point is, insurance involves RISK.  When you are paying for routine health care, there is no risk involved.  Insurance without risk is TAXES.

If we are going to pay TAXES, I'd rather no one make profit off it and that it be paid JUST IN TIME, rather than be arbitraged through the financial markets for the gigantic profit of the insurance business.

AS to the ultimate impact on the financial markets, perhaps the markets will have to find a way to attract more money from the INDIVIDUALS who will get their money back. 

Re: But I still think the biggest downside to this plan is that it makes something simple complicated.

I fail to see what is made complicated by this. It just adds one more option to the mix-- a government insurance plan of last resort. For people with no insurance that actually simplifies things. And for people with insurance that creates the security of knowing they will never be without.
More importantly I think this might be politically doable. If you tell the insurance companies "We're going to put you you out of business" (Or "We're going to force you to restructure radically") you immediately have a huge, huge money interest against you. And if you tell every American with insurance "We're going to take away what you have now and replace with something untried and untested" you are setting things up for the return of Harry and Louise.
The most important goal in this debate is not some pie-in-the-sky ideal health plan; it is getting universal coverage. There are real people out there suffering; helping them should take precedence over abstract ideological perfectionism. As the saying goes "Don't make the best the enemy of the good."

From what I understand, employers started buying health insurance because it was cheaper than raising salaries because their employees were young.

Today, however, I think that we all understand that "employer funded healthcare" can't fulfill promises that have to be built into the overall social fabric to work.

Which continues to raise the issue, why do we continue what amounts to a regressive taxation policy?

Although the authors of Health Care for America talk about negotiating with providers for lower prices, that the proposed agency would actually do so seems unlikely. Indeed, is it not more likely that the agency would simply publish reimbursement schedules -- much as Medicare does, today?

Medicare is cheap, because its modest reimbursement schedules have the effect of off-loading expenses onto under-age 65 insureds or their employers. But the goose has already laid that egg; that chicken's been plucked. When the government tries to control the costs of the proposed program, it'll find there's no pool of money left to subsidize the new program.

There may be ways to reduce U.S. health costs, but "negotiating" with providers isn't one of them.

It may, as well, be noted that with the government handling both sides of the age-65 division, there would be no reason to prefer Medicare services over Health Care for America services. With comparable reimbursement schedules, Medicare expenses wood zoom upward. Example: surgeon's current price for identical, simple wrist operation -- self-pay ($3300); Blue Cross ($2250); Medicare ($790).