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McDermott plan

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Primary sponsor: Rep. Jim McDermott (D) of Washington with support from about one-third of the Democrats in the House.

The single-payer plan would replace the entire health-insurance industry with a tax-financed system. The federal government would pay all medical bills, except extras such as private hospital rooms and cosmetic surgery. Coverage includes long-term nursing home care. The states would administer the system.

Supporters expect massive savings in administrative costs alone as the paperwork and redundacy of a private health-insurance industry is cut out. Further, a national standards board would set all health budgets for states and negotiate drug prices with manufacturers. States would then set medical fees. States would have to fund any budget overruns themselves, but they could also keep money saved from their given budgets.

Most of the funding would come through payroll taxes on employers, who would save some money by no longer supplying private health insurance. Coverage would be universal and comprehensive as soon as the plan takes effect. Individuals would never see a bill.


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