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National Health Plan Message to the Congress on Proposed Legislation.

June 12, 1979

To the Congress of the United States:

Today I am proposing to the Congress a National Health Plan. This major new initiative will improve health care for millions of Americans and protect all our people against the overwhelming financial burdens of serious illness.

It has been 30 years since President Truman challenged Congress to secure for all Americans access to quality health care as a matter of right. It has been nearly 15 years since the Congress, responding to the leadership of Presidents Kennedy and Johnson, finally enacted Medicare and Medicaid. Now, after a decade and a half of inaction, it is time to move forward once again.

I have consulted with the Congress, with consumers, with leaders of labor, management, and the health care industry, and have carefully weighed every option. My proposal is practical, premised on effective cost controls, and consistent with sound budget practices. It will:

—protect all Americans from the cost of catastrophic illness or accident

—extend comprehensive health coverage to almost 16 million low-income Americans

—provide coverage for prenatal, delivery, postnatal, and infant care, without cost-sharing

—establish Healthcare, which will provide more efficient Federal administration of health coverage for the poor and the elderly

—reform the health care system to promote competition and contain costs

—create both the framework and the momentum for a universal, comprehensive national health plan.


No American should live in fear that a serious illness or accident will mean bankruptcy or a lifetime of debt. Yet today over 80 million Americans are unprotected against devastating medical costs, and millions more can lose the protection they now have because of unemployment or the death of a working spouse.

This National Health Plan will protect every American from the serious financial burden caused by major illness and injury. All employers will provide catastrophic coverage for full-time employees and their families, with subsidies to ease the burden on small businesses. No family will be required to pay more than $2500 for medical expenses in a single year. Americans who are not covered elsewhere can obtain affordable catastrophic coverage from a special Federal program. Under this special program, no one will be denied coverage because he or she is labelled a "bad medical risk."


The cost of health care falls most cruelly on America's older citizens who, with reduced incomes, have the highest medical expenses. Because Medicare places limits on hospital days and places no ceiling on out-of-pocket expenses, serious illness threatens senior citizens with loss of their homes and their life savings. Under the National Health Plan, the elderly will have unlimited hospital coverage and will be required to pay no more than $1250 for medical expenses in a single year.

Today, the elderly also face heavy financial burdens because physicians increasingly charge more than the Medicare fee. Under the National Health Plan, physicians would be prohibited from charging elderly patients more than the allowable fee.


The National Health Plan also provides expanded benefits for the poor. The Plan will extend comprehensive coverage-full physician, hospital and related services—to all Americans with incomes below 55% of poverty ($4200 for a family of four). In addition, persons with incomes above 55% of poverty will be able to "spend-down" into comprehensive coverage if their medical expenses in a given year reduce their income to the eligibility level. A family of four with an income of $4500, for example, will be covered after $300 of medical expenses. Under these provisions, 15.7 million poor people, including 1.2 million elderly, will receive comprehensive coverage for the first time.

Today the existence of 53 separate State and territorial Medicaid programs impedes efficient management. Under the National Health Plan, the administration of programs for the poor and the elderly will be significantly upgraded by the creation of a single new Federal program—Healthcare. Healthcare ;viii improve claims processing, reduce error rates in eligibility determination, and facilitate detection of fraud and abuse.


Prevention is the best way to eliminate the suffering and cost of illness, and one of the most effective preventive health measures we can take is to assure health care for expectant mothers and infants. We have been far too slow to learn this lesson. Our infant mortality rates are higher than those of eleven other nations. This inexcusable record can and will be corrected.

Under the National Health Plan, employers will provide employees and their families with coverage for prenatal care, delivery, and infant care to age one, without any cost-sharing. A high priority in future years must be to expand this coverage to include children up to age six. The employer provisions of the Plan, combined with the Child Health Assurance Plan I have already proposed for low income expectant mothers and children, will assure that no newborn child in this country will be denied the chance for a full and productive life by the high costs of health care.


Today, many employees and their families suddenly lose all health coverage when the employee is laid off or is between jobs. Under the National Health Plan, employer-based insurance policies will be required to maintain coverage for 90 days after employment ends. In addition, employer-based policies will be required to maintain family coverage for 90 days after an employee's death, and to cover dependents until age 26.


A renewed emphasis on cost containment must accompany new health benefits. The American people now spend over 9% of the Gross National Product on health services—$200 billion a year. Hospital costs in America are rising $1 million an hour, 24 hours a day. It is time to draw the line.

The National Health Plan is premised on passage of strong hospital cost containment legislation, which will save the American people $53 billion over the next five years, including $28 billion in Federal, State, and local expenditures. The Nation cannot afford expanded coverage without hospital cost containment legislation. In addition, my National Health Plan proposes a $3 billion annual limit on hospital capital expenditures. This Nation cannot support more duplicative facilities and more unnecessary equipment. We must not add to the 130,000 excess hospital beds we now have. We must and we will insure that needed extensions in coverage do not become the excuse for further waste.

This Plan will also provide for a mandatory fee schedule for physicians who serve Healthcare patients. The fee schedule will curb excessive inflation in physician fees and will reduce the disparities in fees paid to rural physicians as compared to urban physicians, and primary care physicians as compared to specialists. Over .time, the new fee schedule will help produce a better geographic distribution of physicians and increase the availability of primary care services.

The Healthcare fee schedule will provide a model for private health insurance plans. Private plans will publish the names of physicians who agree to adhere to the Healthcare fee schedule for all their patients. To assure that Blue Shield and similar organizations reexamine their physician reimbursement policies, the Plan will prohibit physician domination of the governing boards of these organizations.


Competition has been weak in the health care industry because a very high percentage of costs are paid by third parties, and because patients generally cannot determine or shop for the services they need. In recent years, however, health maintenance organizations (HMOs) have injected important competitive forces into the health care system. The National Health Plan will encourage further competition by giving employees and Healthcare beneficiaries new financial incentives to enroll in HMOs or other cost-effective health plans.

Employers will be required to make equal contributions to the various health plans they offer their employees. Employees who choose more cost-effective plans will either pay lower premiums, receive additional compensation, or receive expanded health benefits.

The Healthcare program will pay a fixed amount on behalf of elderly beneficiaries who choose to enroll in HMOs. If the HMO can provide the standard Healthcare benefit package for less than the fixed amount, it must offer additional health benefits to the patient.

The Plan also promotes competition by requiring Healthcare to use competitive bidding to select private companies to perform claims processing and related functions. Demonstration projects by the Department of Health, Education, and Welfare have shown that this change will produce significant administrative savings.


A universal, comprehensive national health insurance program is one of the major unfinished items on America's social agenda. The National Health Plan I am proposing today creates both the framework and the momentum to reach that long-sought goal. In future years, the Plan can be expanded to include all low-income persons. Employer coverage can be made more fully comprehensive, with subsidies to ease the burden on small businesses. First-dollar coverage for preventive services can be extended throughout early childhood. I am today sending to the Congress an outline of a fully comprehensive plan which builds upon the significant health care improvements that I am asking the Congress to enact this session.

Consistent with current budgetary constraints, new Federal spending for the National Health Plan will not begin until FY '83. When the Plan is fully implemented, the Federal budget cost in 1980 dollars will be 18 billion and the premium cost to employers and employees will be $8 billion. A substantial portion of these expenditures reflect reduced out-of-pocket expenses for individuals and reduced spending by State and local governments for their health programs. These expenditures are a social investment in the future of our children, the economic security of our elderly, and the well-being and peace of mind of all Americans. They are an investment in a more effective and efficient health care system. Over time, the Plan's emphasis on prevention, competition, and cost containment will reap important dividends for our Nation and its people.

I urge the Congress not to lose this precious opportunity for progress. The real needs of our people are not served by waiting and hoping for a better tomorrow. That tomorrow will never come unless we act today. The National Health Plan I propose will provide millions of our citizens with better health, greater economic security, and more productive, dignified, and hopeful lives. The American people have waited long enough. I call on the Congress to act without delay.


The White House,

June 12, 1979.

Jimmy Carter, National Health Plan Message to the Congress on Proposed Legislation. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/250098

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