20 November 2009
The Republican Alternative
By Peter Ferrara on 11.18.09 @ 6:08AM
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.
The lower costs from the provisions above would also expand health coverage, as lower insurance costs reduce the number of uninsured. Wider availability of low cost HSA insurance would also expand coverage.
Blue Dog Fraud
Again, exactly the opposite of the House Democrat health care scheme, this Republican plan includes no tax increases, no Medicare cuts, and no health care rationing. In sharp contrast, the latest numbers from CBO show the costs of the Pelosi plan already exploding. Once that plan is fully phased in, over the first 10 years (2014-2023) total government spending would increase by over $3 trillion, not the $1 trillion that has been so widely reported. Total Medicare cuts over those 10 years would be over $1 trillion, and total tax increases would run over $1 trillion as well.
Yet, not one of the supposedly fiscal conservative Blue Dog Democrats voted for this Republican plan. Every single Democrat in the House voted against it. The so-called Blue Dog Democrat phenomenon is a scam. These Democrats were elected to the House in conservative districts on the promise that they were, honest to God, real conservatives. But once elected, they play a game with the left-wing House Democrat leadership providing just enough votes to pass Pelosi/Obama socialism every time, with the rest free to vote against it to keep the scam going back home. Whenever the leadership needs their vote, however, they are there.
It is these Blue Dog Democrats that keep the ultraleft House Democrat leadership in power, from Speaker Nancy Pelosi from San Francisco, to Banking Committee Chairman Barney Frank from Boston, to Energy and Commerce Committee Chairman Henry Waxman from Hollywood, to Ways and Means Committee Chairman Charley Rangel from Harlem, to Judiciary Committee Chairman John Conyers from Detroit. If this is not the kind of leadership you want for America, then the so-called Blue Dog Democrats all need to be replaced.
The Democrats' Death Panel for Grandma
Whether they vote for any of the Obamacare bills or not, the so-called Blue Dogs in both the House and the Senate are enabling the ultraleft Democrat Congressional leadership in the passage of legislation that imposes government health care rationing on seniors under Medicare, which will deny them essential health care, and begins the implementation of such rationing for everyone else.
Included in these Democrat health bills is a new, unelected, Medicare "Commission" which would implement a new "global budget" for Medicare each year. That global budget would set an arbitrary limit on how much would be spent on health care for seniors every year. The Commission is to enforce that budget by deciding what health care treatments, procedures, surgeries, drugs, etc. would be covered under Medicare and paid for, and which would not. If the Commission decides that the expensive surgery or treatment that Grandma needs to stay alive is just not worth the cost, then the doctors will just come to tell you they are sorry, but there is nothing they can do.
The Wall Street Journal explained the result on Monday by quoting prominent health economist Alain Enthoven, who "has likened a global budget to ‘bombing from 35,000 feet, where you don't see the faces of the people you kill.'" The Journal explained further:
"The hard budget cap means there is only so much money to be divvied up for care, with no account for demographic changes, such as longer life spans, or for the increasing incidence of diabetes, heart disease, and other chronic conditions. Worse, it makes little room for medical innovations. The commission is mandated to go after "sources of excessive cost growth" meaning treatments that are too expensive or whose coverage will boost spending. If researchers find a pricey treatment for Alzheimer's in 2020, that might be banned because it would add new costs and bust the global budget. Or it might decide that "Maybe you're better off not having the surgery, but taking the pain-killer," as President Obama put it in June."
No true liberal would support allowing the government to play God in this way, deciding who will live and who will die. But today's so-called liberals are so fiercely partisan now that they have become mentally disengaged. They refuse to even consider any conservative or Republican arguments on any issue, from global warming, to tax policy, to economic policy, to the budget. As a result, they have become dangerous people. What they are supporting is an outright assault on the health care of America's seniors. But they don't have a clue.
The House Republican health bill alternative not only includes no such rationing or Medicare cuts. It actually tries to roll back rationing provisions that have already been adopted. The Federal Coordinating Council for Comparative Effectiveness is a new bureaucracy created in the so-called stimulus bill. President Obama's Council of Economic Advisors explained the role of "comparative effectiveness" in controlling health costs in a report it issued in June, "The Economic Case for Health Reform." The government bureaucracy in Washington would decide what health care works and what doesn't for everybody. It would then enforce its decisions through the payment system for doctors and hospitals. Those doctors and hospitals that don't follow the received wisdom of the wise and all-knowing federal bureaucrats would be penalized in their payments for your care, if they get paid at all.
The Journal again further explained this policy on Monday, saying:
"The reason that physician discretion -- not Washington's cost minded judgments -- is at the core of medicine is that usually there are no "right" answers. The data from large clinical trials produce generic conclusions that rarely apply to individual patients, who have vastly different biologies, response rates to treatments, and often multiple conditions. A breakthrough drug like Herceptin, which is designed for a certain genetic subset of breast cancer patients, might well be ruled out under such a standardized approach."
You might think that your doctor who knows you and your illness would know what will work for you and what won't far better than faraway government bureaucrats that don't know you at all. But don't tell that to today's Washington Democrats, who know everything about everything, and don't need to hear anything from anybody.
This health care rationing involves a radical decline in America's standard of living. Today, Americans enjoy the best, most advanced, high tech, patient-centered health care in the world, devoted to improving and saving their lives. But after the Democrats get through imposing their throwback socialized medicine philosophy, this will all be gone, and we will suffer with the same third rate health care as in other socialized medicine systems around the world. This suits President Obama, whose "moral" vision is that America is just another country, and that it is embarrassingly immoral for America to have more prosperity or power than anyone else. That is why all of his policies are leading to this same dead end for America.
Peter Ferrara is director of entitlement and budget policy at the Institute for Policy Innovation, and general counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is a graduate of Harvard College and Harvard Law School.