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You are a member of a presidential commission appointed to consider a mandatory national health insurance plan and the question of how to fund the plan is being discussed.

Specifically, three separate options are being considered to generate an average of $4,000 per worker—a flat mandatory premium, a doubling of the current 7.65% payroll tax that comes out of people’s pay to cover social security and Medicare, and a 7% increase in income tax.

Think about funding plans from the perspective of three workers:

  • One who makes $25,000 per year
  • One who makes the same in salary but also has $1,000 in investment income
  • One who makes $85,000 per year, including $10,000 in investment income

Based on the above scenario, answer the following questions:

  • Which of the three funding measures, considering the relative financial contributions it imposes on individuals such as these, would you support and why?
  • How has the emergence of different types of health insurance plans—FFS, health maintenance organizations (HMOs), preferred provider organizations (PPOs), and capitation—affected the trends in healthcare services today?
  • What economic and societal factors affect the demand and pricing of healthcare services in today’s health insurance market?

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