Universal Catastrophic Coverage: Principles for Bipartisan Health Care Reform

Health care is a top priority for reformers across the political spectrum, yet there is intense disagreement over how to characterize the failures of the current system and what to do about them. America needs health care reform, but what kind?

Many see the problem primarily as one of a broken health care payment system. Programs like Medicaid and CHIP that are intended to help the poor have gaps that still leave many people without access to quality care. The Affordable Care Act (ACA) offers insurance coverage, even for people with pre-existing conditions, but premiums and out of pocket costs strain the budgets of working-class families. Millions remain one serious illness or accident from medical bankruptcy. When the problem is viewed in this way, the obvious solution seems to be a policy guaranteeing that no one has to pay more than they can afford for the care they need. Proponents of such a guarantee often say they want “single-payer” health care like in other high-income countries, even though that term that is rarely an accurate description of those other systems.

Others see the problem more as the lack of a working market for health care services. On the demand side, they argue the prevalence of third-party payments erodes incentives for health care consumers to shop for effective…