The GOP’s Market-Friendly Health Care Reform
The comprehensive Republican plan is light years ahead of the Democrats' "reform" proposal.
Battling to shed the Democrat-imposed stereotype that they are the “party of no” (no ideas, no cooperation, and no legislative proposals), four Republicans last week submitted a legislative alternative to the Democratic Party’s government-centric health care “reform” proposal.
Senators Tom Coburn, M.D. (R-OK) and Richard Burr (R-NC), along with Representatives Paul Ryan (R-WI) and Devin Nunes (R-CA), announced their “Patients’ Choice Act of 2009” (PCA).
The bill is an attempt to “achieve universal access to quality, affordable health care without bankrupting our children with trillions more in debt or imposing draconian tax hikes on all Americans,” according to the Republican quartet.
With the PCA, Coburn, Ryan, et al. are pursuing the same goals that Democrats like Senator Max Baucus (D-MT) and President Barack Obama (D-IL) claim to want: lower health care costs, greater access for patients, and “universal” health coverage. However, the Republican alternative lays out a different (and far more market-friendly) route to getting there.
Reforming Tax Treatment of Health Benefits
A key feature of the PCA is the implementation of a $5,700 annual tax credit for families ($2,300 for individuals) designed to cover the share of “employer-sponsored” health plans — an average annual cost of $4,200 per family — for which employees currently foot the bill out-of-pocket. This is similar to Sen. John McCain’s (R-AZ) campaign proposal to reform the tax treatment of health insurance by offering tax credits to help workers afford their choice of health coverage. But the PCA doesn’t alter the tax code for employers, meaning businesses won’t suddenly see their tax burdens spike as a result of their employees’ newfound freedom to choose their own health-care plans.
Ironically, the McCain proposal, which then-candidate Obama derided as an “unprecedented tax on health benefits” and used to bludgeon McCain with great effect during the 2008 presidential campaign, is not only a plan from which employees will benefit. It is also a proposal that now-President Obama and the Democrats’ Senate health care team have decided is deserving of serious consideration in their effort to “reform” American health care.
Obama OMB Director Peter Orszag explained the benefit to be gained from revising the federal government’s tax treatment of employer health plans in testimony to the Senate Finance Committee last June. He said:
Imagine what the world would be like if workers [understood] that today it was costing them $10,000 a year in take-home pay for their employer sponsored insurance, and that could be $7,000 and they could have $3,000 more in their pockets today if we could relieve these inefficiencies out of the health system.
In other words, effectively revising the tax treatment of employer-sponsored health care benefits — which are, economically speaking, nothing more than “benefits” provided in lieu of monetary wages — would simultaneously increase workers’ take-home pay and decrease their tax burdens, allowing them to better afford the health insurance policy and benefits of their choice.
Improved Health Care for Poor Americans
Another portion of the PCA is specifically targeted at lower-income Americans who are currently relegated to bureaucrat-run programs like Medicaid and the State Children’s Health Insurance Program (SCHIP). Recognizing that those government-administered programs are so inefficient and undesirable that nearly half of prior-enrolled individuals and families actually decline to sign up for more than one year of nearly free benefits, the Republicans behind the PCA included a section establishing a path to private coverage and efficient medical care for those poorest American.
The PCA would provide those within a certain proximity of the federal poverty line with $5,000 debit cards that can be used to purchase effective, desirable private insurance or to pay for health care out-of-pocket. Not only can this provide poor Americans with resources necessary to acquire effective health care (unlike that provided by the government-run programs to which most of the poor are consigned), but, with up to a quarter of unspent dollars on that debit card each year being rolled over and added to the next year’s available balance, there is (at least theoretically) a great incentive for those benefit recipients to exercise both wisdom and restraint in their use of that provided money.
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Mr. Emanuel, a special operations military veteran, is a columnist, a Pulitzer-nominated combat journalist, and a director emeritus of conservative weblog RedState.com.
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26 Comments
1. Nathaniel:Healthcare reform/Universal healthcare:
May 30, 2009 - 11:12 am 2. Claire Solt:So some in the government are itching to ‘reform’ healthcare? Okay. Let’s do it, but with a little twist! Let the government create and regulate a “brand new” aspect of healthcare that would cut costs, actually benefit patients, and create new competition for big pharmaceutical companies. I’m talking about herbal/plant medicine. The practice of mainstream medicine doesn’t usually recognize tradtional medicines as viable options for treatment. And why not? (Aren’t we supposed to becoming more “green” as a nation?) Plant medicine been around for thousands of years and generally has a better track record than a major corporation’s product. Yes there are pro’s and con’s, but plant medicine isn’t considered a normal treatment option when you visit your doctor. Patients should have the option and doctors should be able to offer it.
Let the government re-define what the FDA calls “medicine” and it’s accepted practice. It’s a small start to a very big problem. If only someone in this new administration would have the courage AND vision to make it happen.
When he ran for Gov, Charlie Crist promised to get afordable health insurance for all, and he did. I see it advertised on TV. check out cinergy.com which offers comprehensive coverage for $6/day. This conversation should be over by now.
May 30, 2009 - 11:42 am 3. David Thomson:“Plant medicine been around for thousands of years and generally has a better track record than a major corporation’s product.”
Do you have any empirical studies to back up such a claim? Government inherently cannot cut medical costs while providing excellent care. This is because human beings are likely to abuse anything deemed “free.” There can be no viable medical system unless individuals believe that the costs are coming out of their own wallet. Logically speaking, the Democratic Party approach is pure madness. It’s really is all about handing power to supposedly brilliant and benevolent elites who attended the best universities.
May 30, 2009 - 11:58 am 4. Well Educated Cad:Herbs? (HHAC) ( hangs head and cries) I cannot tell you how many patients I’ve had almost die from quitting their prescribed medicines and go strictly to herbs. ” Gee Doc- the herbalist told me I didn’t need my insulin anymore! He said this stuff was better (although pricier) and best of all, it has no side effects BECAUSE IT’S NATURAL!”. As much as I distrust pharmaceutical reps, I find them far more honest than “herbalists”. A friend of mine’s brother owns a herbal company and has his own private jet and pilot. When I asked him how could he sleep at night selling useless c*** to people, he just said “I cry all the way to the bank, baby!”.
May 30, 2009 - 3:05 pm 5. G Alston:Their is no program the government can offer that will work well simply because, to them, it’s all about control and votes for delivering vague promises. Health insurance companies are in it for the profit- period. And before you whine about doctors making money, 99% admit they often are forced to see patients for free and just write it off – well, actually, doctors are not allowed to write off bad patient debt on their taxes. We are the ONLY group in the US who cannot.
If I went to work for UPS as a driver and worked the same hours I do now, I would literally make more money.
And like food stamps, yes, if it’s free, people will abuse the hell out of it. I see that every day with Medicaid.
As I’ve said before- the biggest problem in medicine now is the fact that the government runs over half of it already thru Medicare and Medicaid. The question is, how to get them out of it. Short of open revolution, no one else in history has ever come up with a solution either.
I’m not sure why the government is doing what they’re doing. The entire health insurance thing seems like a scam no matter which political side gets involved.
What already works is a catastrophic health plan. I have one that covers my family for $60 a month. The one we have is good for $500k of care (per illness) and has a $5k deductible.
Most people don’t need health insurance to go see the doc for most problems. What you normally pay out of pocket per year is still less than what you pay in employer insurance.
So what’s covered? Anything you have to be hospitalised for, which is where the big expenses are. They pay most of it. It’s just as much as your employer Blue Cross plan pays.
Drawbacks? No drug plan if you’re older and need a continuing prescription. But you can buy drug plans, and much of what most of us need is available via generics anyway.
No plan fits all, but catastrophic health care is plenty suitable for most.
May 30, 2009 - 6:22 pm 6. fred:There is a gap in this proposal: what about people who have lost their jobs, or have pre-existing conditions? Also, for those who are relegated to the ranks of “contract workers” are still at the mercy of the substantially more expensive costs to purchase individual insurance.
I’m not saying I am in favor of the President’s plan. I’m not. It has many flaws in it, plus the cost is staggering and it will impose British NIH draconian rationing and denial of services/treatments/surgeries.
May 30, 2009 - 7:48 pm 7. Confused in Virginia:IMO, while the numbers that are used for people without health insurance may be correct, it is not always that those people have no access to coverage. There are people who just don’t want to pay for coverage because they would rather use their money for other things. I know people who don’t have health coverage because they would rather use that money for travel, clothing, entertainment, ect. When they do end up needing health care, they will go to a county/state-run emergency room, so that they don’t have to pay for that care.
Of course, the government will continue to use their numbers to make the case that there are SO many people/children without health care. If one of my children were sick and I didn’t have health care, you can be sure that I would pay to take them to a doctor, and not the emergency room, unless that was warranted. Of course, the health of my children is more important to me than entertainment. I can’t say the same for everyone who does not have health insurance.
I just wonder, at which point do we stop subsidizing those who don’t want to work, or who prefer to have good, quality entertainment over health coverage for themselves and their children? The government, of course, will use the number of children who don’t have health coverage, and say that they shouldn’t have to suffer because their parents don’t provide for them. So, maybe at some point, if we’re subsidizing those people, we should have a say in their reproduction in order to reduce the number of children without health care.
May 30, 2009 - 10:01 pm 8. Praetorian:“The Patients’ Choice Act of 2009 is an effective alternative to the rationing-based, bureaucrat-run, federal-government-centric proposals being kicked around.”
As opposed to the ration-based, private industry bean counter, run proposal? This “ration based” stuff isn’t going to fly. With private insurance health plans we have rationed care now. They also routinely overrule doctors treatment protocols (usually for a cheaper alternative). Only a fool would argue otherwise. No matter who runs healthcare, government or private, there ARE going to be controls. Private sector health plans do not care about your health. They care about profit. Their only function is to take in more money in premiums that they pay out in claims. They answer to shareholders, not patients and their doctors. If you like your private healthcare plan you can keep it under the Obama proposal. However, your private plan will have to compete with a government plan (similar to MediCare). Why would conservatives be against competition? because they know that the government plan will be more generous and those who choose it can keep it for life regardless of employment, etc. They know the government plan will be more attractive than anything that they can offer. They know that they will eventually die (and they should).
The only thing that the author correctly points out is that the GOP plan will never see the light of day. Another reason conservatives don’t like the idea of universal healthcare is because one of the unintended consequences of such a plan is that it will create a new and huge block of Democratic voters. Once healthcare is passed, and it will be, the Democrats will be viewed as the party that kept their promise. The Republicans will be viewed as the party that said no to their children. Once that happens the GOp won’t be able to pry that vote out of their cold dead hand.
May 30, 2009 - 11:46 pm 9. Well Educated Cad:I have yet to ever have someone tell me that they couldn’t afford their prescription for them or their kids and that I had to “give them” the medication- and I couldn’t reach over and pat their pocket and their pack of cigarettes! When I ask them why they could afford those and not their kids medicine, they will tell me ” Cause that’s important!”. No exaggeration.
May 31, 2009 - 2:20 am 10. canuck:Yet I know 2 doctors who have to pay $15,000 a month for their experimental chemo medications to stay alive and they still work, despite having no health insurance!
Only a small amount of this whole debate relates to healthcare. If the government were serious about reform it would begin by eliminating the “Third Space”, those aspects of healthcare that burden us with cost but do nothing to support quality or access. They could begin with Tort Reform and reform of the product liability rape of health costs. If Medicare and Medicaid actually paid their way, billion of dollars would not have to be shifted to the rest of us. Insurance companies or third party payers skim 15 to 30% of the costs before one office visit is made.
One is left to conclude that this is just another political scam whereby the lower societal groups are now paid by government (most likely Democrat voters) and as quality and access become restricted, those that can afford to purchase private care (most likely Republican voters) will be driven from the public trough. All types of other “benefits” can be conferred along the way to ensure this vote gathering scam is perpetuated…dental care for kids with no teeth, drug programs, etc.
This is political 90%…quality and access 5%, bureaucratic slight of hand 5%.
May 31, 2009 - 4:51 am 11. Captain Obvious:Did I miss it? I didn’t see anything in this article about wellness and prevention. Provision for exercise programs and diet counseling could save us millions in “healthcare” expenses.
May 31, 2009 - 5:59 am 12. Michael:Here’s a wacky idea. Have private insurance companies in a pool that compete. They get rated by patients, hospitals and doctors. Those that have the best coverage win and those that don’t try harder or fail. That pool of companies would compete for private and government monies.
Guess what. Captalism with all it’s faults is still vastly superior to all others and government systems most of all.
May 31, 2009 - 7:36 am 13. G Alston:#10 — They could begin with Tort Reform and reform of the product liability rape of health costs.
Although bandied about malpractice accounts for only 2% of healthcare costs. This is from government figures. You can look it up.
#11 — Did I miss it? I didn’t see anything in this article about wellness and prevention.
Perhaps it’s because much of this is nonsense. Statistics lie. Most health care goes to the aged. This will not change. It’s like cancer stats. Get to be 70+ and you’re bound to die of something. Get rid of retirement age and beyond stats and the numbers are way different.
“Wellness” is Orwellian. Some jurisdictions and insurance companies are using “wellness” as their excuse for control.
You can read about some of this here:
http://junkfoodscience.blogspot.com/
May 31, 2009 - 9:54 am 14. Tommy:It’s funny how, suddenly, the GOP wants to do something to reform health care. There was a Republican president for the past eight years. How come the GOP wasn’t as anxious then? My guess is that if McCain had won the election, it would be business as usual.
May 31, 2009 - 10:44 am 15. The Historian:BEWARE OF SOCIALIZED MEDICINE
The Obama plan will ruin the best health care available in the world today.
http://greensrealworld.blogspot.com/2009/05/beware-of-socialized-medicine.html
May 31, 2009 - 12:51 pm 16. myth buster:Malpractice may only be 2% of the costs, but that figure doesn’t include the added cost of defensive medicine, that is, doctors who order unnecessary tests to confirm things they already know in order to protect themselves from lawsuits.
Re: Government competition
May 31, 2009 - 2:06 pm 17. GinnyPub:Conservatives have a problem with monopolistic tactics. The government doesn’t have to turn a profit, since a government run system can always go to Congress and ask for more taxpayer money. Thus, it can offer prices that the private insurers can’t offer because they charge below cost. In a free economy, this is called dumping, and it’s illegal. Now, if you included in the law that no taxpayer money is permitted to be appropriated to this government run system, and it must instead be funded completely off of premiums, then I may be willing to support it, but I don’t want to pay taxes to fund this.
I’m glad someone mentioned “dumping”. Chicago’s Urban Health Initiative has been a failure in providing “care”. http://ginnypub.wordpress.com/2009/03/03/urban-health-initiative-for-all/
May 31, 2009 - 7:12 pm 18. Well Educated Cad:Anybody remember Hawaii’s universal health “care” program? No? Maybe that’s because it failed in 7 MONTHS.
http://www.foxnews.com/story/0,2933,440561,00.html
” Only 2% of the costs of healthcare are related to lawsuits”? Bovine secretions! How about 2% of the costs are DIRECTLY due to lawsuits- the indirect costs are astronomical!!!
Jun 1, 2009 - 12:56 am 19. Mary Grabar:Say, a little old lady is found lying on her floor in the nursing home. Did she have a stroke? Fall? Or just curl up and take a nap? Due to lawsuits, no one there will even examine her- they call the patient’s doctor, so they won’t get sued. Knowing what idiots he usually deals with at the nursing home, he okays the transfer to the ER, for the ER doctor to see, so he doesn’t end up getting sued. This is because he has a full office of patients as well. Now the EMS gets there, and finds that all the little old lady can say is “Roodle roodle” and not knowing what happened , follows their policy and “packages” the lady on a backboard, C collar and tape, so THEY won’t get sued. Now they show up in the ER with someone who looks like they’ve been in a major car wreck. And the little old lady is firmly saying “Roodle roodle”! The ER doc and EMS have no clue what may have happened and the patient cannot tell them, so here comes the “Nursing home workup” including a CT of her head.
The costs of this little trip? Oh, say $1500. Now multiply that figure by about 1000 times a day across the country and I’d say that’s pretty much more than “2%”, wouldn’t you?
ALL OF THIS is because everyone involved is afraid of being sued, so they CYA. And this is just a very small sample of what goes on everyday.
Good article. This needs to be publicized more.
Jun 1, 2009 - 3:38 am 20. G Alston:#18 — Bovine secretions!
malpractice costs
http://www.cbo.gov/ftpdocs/49xx/doc4968/01-08-MedicalMalpractice.pdf
From the congressional budget office.
Here are current (2007) average malpractice premiums for US, by specialty. Family practice, 12,500. GPs, 7,500 Internists, 12,500. Ob/gyns, 55,000 Pediatricians, 12,500 All primary care: 17,500 . There are about 750,000 MDs in the country : a ballpark number for total malpractice premium costs is going to be (0.75 x 10 e 6) x (~2 e 4) = 15 billion. But that might be low – maybe specialists pay a lot more. Since total premiums were about 10 billion in 2000, let’s say that they’re paying 20 billion total now – that’s reasonable, since nothing I’ve seen suggests that rates have doubled over that period. We’re on the same page. . Total health care costs for the US passed 2 trillion (2 e 12) in 2006. Malpractice premiums account for about 1% of total healthcare costs.
There was certainly less than that in legal payout, so doubling anyway to be generous gives the 2%.
#16 — Malpractice may only be 2% of the costs, but that figure doesn’t include the added cost of defensive medicine, that is, doctors who order unnecessary tests to confirm things they already know in order to protect themselves from lawsuits.
As for defensive medicine, the only part I object to is the part that has low payoff. I don’t think anyone has been able to come with a decent estimate of those costs. As for the idea that any argument can be won by citing some unmeasurable factor – well, I’m not from Missouri, but I grew up near there.
Jun 1, 2009 - 8:58 am 21. Derek:This plan is worthless without a mandate that everyone buy health insurance. People that don’t have health insurance drive up the cost of health insurance. Until that point is addressed, solutions like this one will always be woefully inadequate. Plus there’s the absence of a national insurance exchange (which unlike state ones would allow people to buy insurance across interstate lines). It’s a crap plan overall. It’s easily worse than the Obama plan. I don’t think people understand the fact that you can’t half ass free market solutions. Either you provide a free market (mandate insurance or let hospitals refuse care; allow interstate competition) or you provide Obamacare (pathway to single payer). Stop labeling things that you like “market friendly.”
And that’s not getting into the subsidy effect. Providing a subsidy without any form of cost control simply distorts prices. Why do you think college tuition costs expand so rapidly? If you give everyone in america 2300 dollars to get an insurance plan, i’m going to charge people an extra 2300 a year.
Like I said, this plan is terrible.
Jun 1, 2009 - 1:39 pm 22. happy1ga:I love it when people talk about all the poor people who don’t have health ins in this country! What about the ones who just DON’T want it? Most young people, especially those who are healthy, and especially those who are single, had rather spend their money on clothes, food, partying, booze, etc. And that is their right. Everyone should have to pay for what they are responsible for, but if these people don’t choose to pay a monthly fee to go to the doctor 1 time every two yrs, then why should they? As the Cad said above, it is personal priorities. Some people had rather have cable, or cigarettes, or a nice car.
Jun 2, 2009 - 5:16 am 23. Dr. Bukk:Why can’t a new plan be based on GWB’s prescription drug program, which cost far less than anticipated due to competition between plans? BTW, for those of you who hate Bush for this program: how long has it been since you heard of old people eating dog food to afford skyrocketing drug costs?
Allow insurance companies to market nationwide and they will force legislators to make policies competitive.
Insurance companies have saved me thousands by limiting insane fees charged by doctors.
Take more drugs off the prescription list. Let people purchase antibiotics, prednisone, valtrex and many other safe drugs without a script so they can see a doctor during practice hours, at a reasonable cost instead of going to emergency rooms for drugs you could buy over the counter in most countries.
Jun 2, 2009 - 1:33 pm 24. Dr. Bukk:One more thing, we need to follow the example of Texas in limiting phony lawsuits via tort reform and requirements to prove the plaintiff is actually disabled.
Jun 2, 2009 - 2:04 pm 25. Realitycheck:I note that one comment mentioned that this well-constructed GOP plan would not work and that the government must MANDATE that all have health insurance. Excuse me for pointing this out but when the government begins mandating that we, as private citizens, must do certain things with our private lives; that is when our republic is dead, and this country can officially become a fascist state. It is well on its way already.
People, is this what we want? I didn’t think so. Do we let the minority of people who “don’t have access to health care” tell those of us who do that we must do something? I didn’t think so, either. So, it’s about time that we stand up, quit mumbling and quit being the MAJORITY with no voice (and I’m not speaking of the majority that won the election, either), I’m speaking of the non-vocal majority of Americans who have the same beliefs, the same ideals and who have sat by and let this country go to hell. This will not happen any longer. No longer the silent majority.
Jun 9, 2009 - 9:56 am 26. Rick:#22
Jun 9, 2009 - 2:47 pmI am sure there are those who think they are impervious to illness and forego healthcare coverage but what about those who have lost their jobs and have some type of pre-existing condition. Yes COBRA is a help but frequently unemployed people can’t afford to pay the full fare. You folks continue to think people want a free ride, they do NOT. They want access to healthcare plans and not discount programs such as the one cited by #2. There is no such thing as real healthcare insurance for $6 per day unless of course you don’t want any medical care covered.
The cost of healthcare is included in everything you buy. We are already subsidizing employer based healthcare benefits in two ways, 1) business’s price their goods and services accounting for all expenses including the cost of healthcare, 2) employees are not only paying their share they are getting reduced wages/salaries because this is considered by most employers as the “hidden Paycheck”.
When will this country wake UP? The GOP alternative is not acceptable because it leaves too many things up to the states. Just think about the differences in public education from state to state, the same thing will happen to healthcare if we don’t provide minimum standards for all.