A Proposal for Financing National Health Insurance

In this 1999 article, physician economist Dr. Edith Rasell outlines a possible system for financing national health insurance. Savings on administration (currently 31 percent of health spending) would be combined with current sources of public funding (Medicare, Medicaid, SCHIP, etc). A modest 2 percent personal income tax would replace insurance premiums and out-of-pocket costs currently paid by individuals (the average individual health insurance premium alone is today more than $3,500), and a 7 percent payroll tax would replace employer contributions and relieve them of the costly burden of administering their own health benefits (industrialized sectors currently pay as much as 14 percent of payroll for health care).

Although Dr. Rasell’s is the most often cited financing structure, any number of different arrangements could possibly be used. Since the financing of public programs is more a matter of tax policy than health policy, PNHP does not endorse any single financing proposal.

Read “An Equitable Way to Pay for Universal Coverage” (pdf)