The GOP health bill — which House Democrats rejected — would mean lower costs, more coverage, no taxes, and no deficits.
Democrats have been telling us all year that the Republicans have no health reform alternative. They are just the party of no! So we must have all been hallucinating when, lo and behold, just before the recent House vote on the Pelosi/Obama government health care takeover bill, there was a vote on…the Republican alternative.
Exactly the opposite of the House Democrat health plan, the Republican alternative would actually reduce the cost of health insurance and care. It would also expand coverage and provide a safety net ensuring that no one would be excluded from essential health coverage or care. It would also expand consumer choice and control over health care.
At the same time, the Republican plan involves no tax increases, no Medicare cuts, no rationing, and no increased deficits now or in the future. Exactly how all this is accomplished is fully explained below.
The Republican plan allows insurers to sell health insurance across state lines. This would greatly expand competition, enabling the more than 1,000 private insurance companies to each compete nationally. That vastly increased competition would reduce health insurance premiums and costs. It would also greatly expand consumer freedom of choice.
We hear liberal complaints about areas within some states that only have a couple of insurance companies competing. That is entirely due to government regulation. We see ads for car insurance, and every other type of insurance, competing nationally all the time. There is no reason why we can’t enjoy the same for health insurance.
The Republican plan, of course, includes medical liability tort reform modeled after successful reforms in California and Texas. This would sharply reduce costly junk lawsuits and the resulting costly defensive medicine pursued just to protect against frivolous claims. Democrats crassly oppose this because of the enormous contributions they receive from Plaintiffs’ attorneys, which has been openly admitted.
The Republican plan would further reduce costs by enhancing Health Savings Accounts (HSAs), which are themselves a Republican reform fundamentally changing health care by introducing market incentives to reduce costs. Individuals with HSAs keep most of their money for health care in a savings account, earning tax-free interest, with the rest going to purchase a high-deductible, catastrophic insurance policy. The premium cost for such catastrophic coverage, with deductibles generally ranging from $2,000 to $6,000 a year, is much lower than for standard, low-deductible health insurance, allowing the savings in the account to grow quickly to cover the entire deductible. Patients with HSAs are free to use the money in their accounts for any health care, including preventive care, check-ups, prescriptions, dental care, eye care, and the full range of alternative medicine. Nothing could do more to increase consumer freedom of choice and to put patients in control of their own health care.
Money kept in HSAs can be used for health care in later years, or for anything in retirement. So patients are effectively using their own money for non-catastrophic care. That provides powerful incentives to avoid overly costly or unnecessary care and to look for doctors and hospitals that can provide quality care at lower cost, creating real market competition to reduce costs.
The Republican House alternative would allow consumers to use funds saved in HSAs to pay for the catastrophic insurance covering costs above the deductible. Broadly expanding HSAs across the entire health system, including Medicare and Medicaid, would essentially solve the health cost problem.
CBO confirms that this Republican alternative plan would reduce health insurance costs, exactly the opposite of the Pelosi/Obama plan that CBO confirms would increase health insurance costs. The CBO analysis shows that for millions of families health insurance premiums would be almost $5,000 per year less under this GOP plan than the cheapest health insurance under the Pelosi bill.
Expanded Coverage and a Safety Net
The GOP alternative also includes several provisions to expand health insurance coverage. Most important are the Universal Access Programs that would expand uninsurable risk pools to ensure that all Americans would be able to obtain coverage for any pre-existing condition. The uninsured who become too sick to buy private health insurance covering their condition can turn to their state’s risk pool for coverage. They are charged premiums for such coverage based on their ability to pay. Each state then subsidizes its uninsurable risk pool to ensure that it could cover all costs.
Few people become truly uninsurable because of their health condition, so the risk pools are a low cost solution. But trying to force these people into the same market risk pools as everyone else through such policies as guaranteed issue (requiring insurers to accept all applicants for coverage regardless of health condition) and community rating (requiring insurers to charge everyone the same regardless of health condition) just ruins health insurance for the general public, making it too expensive and sharply increasing the uninsured as a result. Providing for the uninsurable separately through their own pool is consequently a much better policy.
The GOP plan would also enable small businesses to pool together to offer health insurance at lower prices, like big corporations and labor unions, which would further increase coverage. The proposal would also allow and encourage coverage for young adults on their parents’ insurance through age 25. And though this has already been the law for many years, the Republican plan would also expressly prohibit insurers from canceling health insurance policies as long as payments continue, unless the insured commits fraud or conceals a material fact about a health condition.
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