The Right Prescription

A Serious GOP Alternative to Obamacare

The Patient CARE Act.

By 2.3.14

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The most frequently repeated Democrat talking point concerning Republican opposition to Obamacare is the claim that the GOP has offered no alternative. This is nonsense, of course, but it has proved an effective device for suppressing a serious debate about the President’s “signature legislative achievement.” Predictably, Obama offered yet another variation on the theme during his recent State of the Union message: “I don’t expect to convince my Republican friends on the merits of this law.… So again, if you have specific plans to cut costs, cover more people, and increase choice — tell America what you’d do differently.”

Ironically, as the President well knew when he read those words from his teleprompter, the latest of several Republican alternatives to Obamacare had been announced just a day earlier. This plan, the Patient Choice, Affordability, Responsibility, and Empowerment Act (or CARE Act), has been put forward by GOP Senators Tom Coburn, Richard Burr, and Orrin Hatch. But it is more than a legislative prophylactic meant to protect Republicans from the charge that they aren’t for anything but a return to the dreaded “status quo.” The CARE Act, unlike the stillborn Obamacare, is a serious health care reform proposal.

As the plan’s authors put it in this op-ed, “Our proposal starts with a very different set of assumptions from those who designed ObamaCare. We believe Washington, D.C. should actually reform — not try to manage — the private health insurance market.” The CARE Act, as a necessary first step, would repeal Obamacare along with its justly reviled individual mandate. Yet, according to an analysis by the Center for Health and Economy (H&E), “The number of insured under the proposal is estimated to be 1 percent higher than under current law.” H&E also projects that it would “lower average premiums.”

These advantages notwithstanding, the proposal is not projected to result in any reduction in access to care: “The CARE Act is projected to result in similar patient access to providers… as under current law.” The H&E analysis further reveals that the plan is surprisingly deficit friendly: “Compared to current law, the proposal will yield an estimated 10-year net savings of $1,473 billion.” The plan would also lead to an improvement in the efficiency of doctors, hospitals and other health providers: “The CARE Act is expected to lead to 2 - 3 percent greater medical productivity… as compared to current law in 2017.”

How will the CARE Act accomplish these miracles? In the case of provider efficiency, the H&E analysis cites “enrollment in high deductible plans, which are associated with higher medical productivity, and a smaller Medicaid population.” And the CARE Act would also incentivize states to “adopt a range of solutions to tackle the problem of… defensive medicine,” something for which doctors and hospitals have long pleaded. Defensive medicine is a very real phenomenon that generates billions in costs for unnecessary tests ordered to protect providers from ambulance chasers like former VP candidate John Edwards.

The ability of patients to access primary care would also improve as a collateral benefit of a reduction in frivolous malpractice suits. One of the inevitable effects of junk lawsuits is a shortage of physicians in states that fail to address the issue. Conversely, states that embrace tort reform invariably enjoy the opposite experience. Ten years ago, for example, Texas enacted serious malpractice reform. The result? As the Heritage Foundation reports, “The reform bill’s most significant achievements have been increased access to health care and… the number of licensed physicians in the state will almost have doubled.”

How will that help the uninsured? Most of the involuntarily uninsured are the victims of two government-created problems that render individual coverage unaffordable — benefit mandates and the inability of health insurance companies to sell policies across state lines. The CARE Act would “scrap Obamacare’s expensive mandates,” and “give consumers the ability to shop for health plans across state lines.” The resultant premium decreases, combined with means-tested tax credits for individuals whose incomes fall below 300 percent of the federal poverty level, would essentially eliminate involuntary lack of health coverage.

What about people with pre-existing conditions? The CARE Act “would create a new ‘continuous coverage’ protection. Under this new protection, individuals moving from one health plan to another — regardless of whether it was in the individual, small group, or large employer markets — could not be medically underwritten and denied a plan based on a pre-existing condition.” It would not, however, require health insurers to cover everyone with pre-existing conditions. Coverage for individuals who have not maintained “continuous coverage” would fall under the aegis of state-run high-risk pools.

Finally, one of the most important features of the CARE Act is its Medicaid reforms. As I wrote in this space last month, the cruelest fraud perpetrated by the authors of Obamacare is their plan to dump most of the uninsured into Medicaid, a program that will prevent them from accessing primary care and leave them in worse health than if they had remained without any coverage at all. The CARE Act would use “per capita caps,” a variation of block-granting originally proposed in 1997 by Bill Clinton, to give states the flexibility to use Medicaid funds in ways that are cost effective and actually beneficial to patients.

Despite its retention of popular Obamacare provisions like the prohibition of lifetime limits on insurance benefits and the “slacker mandate,” the CARE Act is being trashed by Democrat mouthpieces in the establishment news media. The New York Times denounces the plan for all manner of sins, including this thigh-slapper: “The exchanges on which consumers currently shop for private insurance would be eliminated… people would have to rely on brokers and private-sector websites.” Heaven forefend! Consumers would be forced to use websites that actually work? This sounds like a feature rather than a bug.

Another howler is provided by Jonathan Cohn at the New Republic: “To call this proposal a ‘plan’ is also a little premature. Many of the details are vague and some appear to be in flux.” This from a man who shamelessly pimped a “reform” bill whose contents remained virtually unknown until it passed. Even at Forbes, Matthew Herper characterizes the CARE Act as “a big tax hike,” an absurd distortion of the plan’s partial elimination of preferential tax treatment for employer-based coverage. Herper’s colleague, Avik Roy, points out that he conveniently “ignores the $1.2 trillion tax cut from repealing Obamacare.”

The real objection the legacy media have to the CARE Act is that it deprives the Democrats of a talking point they desperately need for the upcoming midterms. The voters hate Obamacare, and they hold its supporters in low regard. Until last week, vulnerable Democrats could get away with claiming that their GOP rivals have no real health care plan. The Coburn-Burr-Hatch plan can neutralize that claim, and could be used by smart Republicans in the same way Newt Gingrich used the Contract With America in 1994. If managed properly, the CARE Act could save U.S. health care and regain the Senate for the GOP.

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About the Author

David Catron is a health care consultant. He has an MBA from the University of Georgia and blogs at Health Care BS.