What's the Best Way to Pay for Americans' Health Care?

ABC News has asked a panel of experts five questions about what it would take to fix the U.S. health care system, and we'll post one question and answer every day this week.

The experts include physicians, academics and consumer advocates.

Below is the fourth batch of responses they've brought to this five-part series -- some surprising, some simple.

Question: What's the best way to pay for Americans' health care?

Dr. Alan Garber

Director, Center for Health Policy, Stanford University

The funds for health insurance will have to come from both public and private sources. It is unlikely that we can avoid using general federal revenues for a chunk of the costs, which means that we will have to find ways to control Medicare expenses as part of any plan.

Dr. David Gratzer

Senior fellow at the Manhattan Institute, and a licensed physician in the United States and Canada. Gratzer wrote "The Cure: How Capitalism Can Save American Health Care"

I'm unconvinced that employer-based health insurance will last -- only 58 percent of companies now offer coverage, a 20-year low. But if we move away from this idea, we'll need to help people pool risk -- not easy. Still, private health insurance is a better bet than nationalized health care.

Dr. Joanne Lynn

Physician and researcher with the Department of Health and Human Services Office of Clinical Standards and Quality at the Centers for Medicare and Medicaid services

The U.S. has three major arenas for enhanced coverage, and the ways to pay for improvement differ:

For those who have no coverage at all, the approach may well involve state initiatives to extend coverage, managing costs so that businesses can cover workers and their families, and assuring backup plans for citizens who have no other access to coverage.

For the elderly who have medical care coverage but no long-term care coverage, CMS and others have encouraged younger people to buy long-term care insurance and to attend to the issues of retirement income and security, though broader initiatives may prove to be needed.

For family caregivers upon whom so much of the care of disabled and elderly persons depends, the society will probably need to consider strategies to make continued high levels of service possible as the numbers of persons needing care rises dramatically and the numbers of potential caregivers shrinks.

Lisa McGiffert

Senior policy analyst at Consumers Union, publisher of Consumer Reports

The way we pay for health care today is the most complicated and wasteful in the world, with too many layers of insurance-company bureaucracy and aggressive collection tactics that send the sickest Americans to bankruptcy court. A reformed system must be affordable so everyone can participate and get a handle on spiraling costs.

We want everyone to contribute to pay for their health care; we want payments to be collected fairly and efficiently; and we want funding to adequately cover the health care all Americans need.

We need a uniform way to collect premiums that requires shared responsibility and treats everyone fairly, such as an annual income assessment or payroll deductions similar to the one that has been used very efficiently for decades to fund Medicare's universal health care for American elders.

Robert E. Moffit

Director, Center for Health Policy Studies, the Heritage Foundation

First, use the existing health care tax breaks, estimated at $210 billion in 2004, as the basis for a national tax credit system.

Second, roll over the existing government subsidies that are used to offset the costs of uncompensated care (approximately $35 billion) to fund a low-income health care voucher program. Third, fold annual appropriations for the State Children's Health Insurance Program into the voucher/tax credit pool for families, and allow children to enroll in the plans chosen by their parents.

Fourth, states can and should supplement any federal tax credit or voucher assistance with tax credits or subsidies of their own, particularly for poor or low income Americans.

Finally, Congress could appropriate such sums as necessary to supplement the refundable tax credit or health care voucher program.

Debra Ness

President, National Partnership for Women and Families

We need to start paying for health care based on quality and performance, not just the number of services provided. We need a system that rewards the right kind of care at the right time -- especially the kind of preventive and primary care that can keep people healthy.