A Republican alternative to the health care overhaul plans of congressional
Democrats that is taking shape on Capitol Hill includes the use of new
state-based insurance exchanges and tax subsidization of insurance
Republican leaders introduced the Patients' Choice Act (S 1099, HR 2520) to
counter Democratic health care reform plans that have been widely discussed
but had not yet been translated into legislative bills by mid June.
The Republican proposal would require each state to establish health
insurance exchanges composed of private health insurance companies through
which individuals could pick their coverage. The exchanges would serve as
clearinghouses of available insurance plans through which individuals could
compare features and prices of plans that meet a minimum benefit threshold.
The legislation would provide $5,700 in tax credits to families and $2,200 to
individuals to subsidize insurance premiums. An additional $5,000 tax credit
would be given to low-income families. Funding for the credits would come from
a new tax on employer-provided health benefits.
The measure "will finally enable Americans to own their health care
instead of being trapped in the current system, which leaves people either
uninsured, dependent on their employer, or forced into a government
program," said Sen. Richard Burr (R-N.C.), who cosponsored the House
The plan would allow states to shift residents covered by Medicaid into
private coverage. In addition, it would establish a system to automatically
enroll uninsured Americans in private insurance plans at emergency departments
and motor-vehicle departments and through employers.
Sen. Tom Coburn (R-Okla.), a physician and the Senate bill's sponsor,
maintained that what he described as increasing government control over health
care has failed to make health care more affordable or accessible.
The Republican health reform bill would "provide every American with
access to affordable health care without a tax increase, more debt, and
waiting lines," Coburn said, suggesting that Democrats are working on
legislation likely to produce these problems.
The Republican plan, which supporters plan to offer as an amendment during
debate on the major Democratic health care proposals planned for votes later
this summer, aims to achieve universal coverage for U.S. residents while
remaining budget neutral. It would not establish new government health care
The Republican proposal to address rising health care costs and rates of
uninsurance is in contrast to the emerging outlines of the reforms favored by
Democratic leaders in Congress and by President Obama.
Senate Finance Committee Chair Max Baucus (D-Mont.) said that the GOP plan"
would destroy the insurance system in America as you know it"
because it would eliminate the employer-based health insurance system. Baucus
and other Democrats said businesses would cease to offer their workers
insurance plans if such insurance was no longer tax deductible to employers,
which would be the case under the Republican plan.
The proposals by Baucus, who is leading the reform effort in the Senate,
would build on the employer-based insurance system with new programs,
including a publicly funded insurance option for the uninsured—similar
to Medicare. The Democratic reform effort is expected to cost at least $1.2
trillion in the first 10 years, according to Democrats, although proponents
maintain that the cost savings it achieves through prevention and reducing
illnesses that go untreated because of lack of insurance would eventually
result in overall savings.
The support among many Democrats, including Obama, for the overhaul to
include a publicly funded alternative for people who are unable to qualify for
private insurance has become increasingly contentious. Most Democrats,
including Sen. Charles Schumer of New York, have stated that a public option
would end up increasing competition by breaking the "monopoly"
enjoyed by private insurers.
The public option, however, has exposed health reform's political fault
lines among Democrats. The so-called Blue Dog coalition, a voting block of
fiscally conservative House Democrats, issued a letter in May that said it
would support only a public plan that follows the same market-competition
rules that private insurers must follow. Those rules would include
requirements that a public plan negotiate payment rates with clinicians, allow
voluntary participation in the plan by both clinicians and patients, and
require its premiums and copayments to pay for all of its operations.
However, the public option has been criticized as too limited a reform by
some liberal Democrats. For instance, 78 Democrats in the House have
cosponsored legislation (HR 676) to expand Medicare eligibility to all
Americans and replace most private insurance.
Republicans have repeatedly stressed that inclusion of a public option
would likely eliminate any health care reform support from members of their
party, despite the fact that Baucus and Obama have repeatedly emphasized the
need for bipartisan support to ensure a reform plan's success. Republicans
base their opposition to a public insurance option on their contention that
private insurers could not fairly compete with a plan that did not have to
make a profit, thus driving private plans out of business.
Democratic leaders in Congress have announced that they plan to work toward
passage of health care reform measures in both chambers before the August
recess and to pass a bill in the fall.
Congressional health reform proposals can be accessed at<http://thomas.loc.gov>
by searching on the bill numbers, HR 2520, S 1099, and HR 676.▪