Dissecting the Republican Health Care Plan (Part 2)
An admission: I shouldn't be calling this "the Republican health care plan." There's no involvement from GOP leadership. There's no endorsement from the House Republican Caucus. The Patient's Choice Act is the work of four men. Sens. Tom Coburn (Okla.) and Richard Burr (N.C.), and Reps. Paul Ryan (Wisc.), and Devin Nunes (Calif.). Sen. Chuck Grassley (Iowa) apparently helped them out a bit, but his name is not on the effort, and he's not endorsing it.
The plan itself is like the bastard child of the Massachusetts health reforms and the McCain campaign proposal. And that's not a bad thing. Like the McCain health reforms, it erases the employer tax exclusion. That means the health benefits your employer purchases for you will get taxed. And that means your employer is likelier to drop your coverage. The idea here is simple: To end the favoritism given to employer-based health care.
Like the McCain health plan, it plows the money the government used to be spending on the employer tax exclusion into a refundable tax credit that everyone receives ($5,700 for families, $2,300 for individuals). This is actually a progressive change. Rich people are generally employed and their employers generally provide them with health care benefits. Poor people are frequently not employed and the employers they do not have do not provide them with benefits.
But get ready for the break: Unlike the McCain health care plan, the Burr/Coburn/Ryan/Nunes proposal does not leave individuals to fend for themselves on the individual market. This was the McCain plan's fatal flaw. The individual market is cruel, unpredictable, and expensive. The Patient Choice Act does not repeat it.
Instead, all those people who would be purchasing health insurance on their own under the McCain plan purchase it together under the Patient's Choice Act. States are tasked with creating insurance marketplaces where consumers can easily compare different insurers, regulating insurers so they don't make money by making health coverage unaffordable for sick people, regulating insurance products so they meet some minimum standard of comprehensiveness (serious wonks: This is the standard. Go nuts.), and creating automatic enrollment provisions that encourage more people to purchase health coverage.
Are there problems with the proposal? Yes. Big ones. The minimum benefit package is too stingy. There aren't sufficient subsidies for low-income consumers. The plan controls costs by encouraging people to purchase less comprehensive insurance. That's fine until people fall comprehensively ill. It has a tendency to mistake a health care policy paper for the Sean Hannity Variety Hour and say crazy things like "the Federal government would run a health care system — or a public plan option — with the compassion of the IRS, the efficiency of the post office, and the incompetence of Katrina."
But it's still a step forward for the Republican Party. It's an admission that individuals can't go it alone. That the state has a large and important regulatory role to play. The business model of insurers is not simply broken but actively cruel. A Republican Party that accepts the principles of this plan is a Republican Party that is much likelier to accept the principles of Obama's eventual plan.
May 21, 2009; 8:00 AM ET
Categories: Health Reform
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