Thursday, August 06, 2009

Republican Health Care Alternative Isn't Real Reform

While Congressional Republicans have been railing against the Obama administration's proposed $634 billion national health care plan, the Democrats in Congress are working feverishly to pass this legislation before adjourning for their summer recess. The administration is pushing hard to get this done now, because they understand that once congressional members go home and face the wrath of their constituents, the chances of getting it done at all will be significantly reduced.

The Republicans understand this, and recently offered their own alternative proposal called The Patients’ Choice Act. Its proposed goals are, “...strengthening the relationship between the patient and doctor; using the forces of choice and competition rather than rationing and restrictions to contain costs; and ensuring universal, affordable health care of all Americans.”

Sounds great. But what would The Patients’ Choice Act actually do?

The aim of the bill is affordable health care for every American offered through a state Health Insurance Exchange, funded via a federal and state partnership. Insurance offered through the Exchange would be required to meet federal benefit standards, which in one instance are defined as the same “health benefits given to Members of Congress.” Every American would be auto-enrolled and participating insurers would be required to cover everyone regardless of age or health history. Premiums would be risk adjusted, and set by an “independent board.”

The model for the program is Massachusetts’ “Connector” plan. And while Massachusetts has been successful in providing health insurance for a large percentage of its state residents, the cost is exorbitant and is bankrupting the state. In fact, Massachusetts has asked the federal government for a $1 billion bail-out, with the shortfall expected to grow to at least $4 billion over the next ten years.

I'm not exactly sure why Republicans think a system bankrupting one state would somehow be financially viable for the entire country.

The Patients’ Choice Act also offers a tax rebate for individuals purchasing their own health insurance. and gives workers the same tax break employers now have for providing health benefits to their employees. This actually makes good sense and would give patients more control over their health care costs and personal medical decisions.

The bill also includes sorely needed reforms for Medicaid and Medicare — two of the largest drains on the federal budget. Low-income Medicaid families would receive direct assistance purchasing private plans that best fit their needs. Medicare would shift to a direct reimbursement model and allow seniors to choose a private plan on the open market, forcing plans to compete against each other based on cost and benefits.

The proposal also includes language to federally coordinate wellness programs, create financial incentives for health information technology, privatize the Veterans Administration System, encourage state-level tort reform, and allow Native Americans to participate in the private health care system.

While there's a lot that makes sense in The Patients’ Choice Act, the foundation of the bill remains centrally-planned, government-controlled health care — which doesn't work — because benefits and prices would be set by bureaucrats, not the marketplace. And although the goal of allowing every citizen the option of choosing health benefits matching those of members of Congress is admirable, let's be realistic, it's not fiscally possible.

In a true free market, insurance companies would compete openly, being allowed to offer a wide array of benefit plans, unencumbered by government benefit mandates — which is why health insurance is so costly in our state and why we basically only have four providers. Insurers would be free to price plans competitively to attract customers. For example, plans targeting seniors wouldn't include mandatory maternity coverage, as centrally planned, one-size-fits-all government mandated coverage undoubtedly will. Patients, and their particular health care needs should create the market, and determine the winners and losers in the insurance industry, not government bureaucrats.

As long as the government sets the benefit and price standards in a centrally-planned fashion, patients will lose their ability to control their own health care decisions, costs will continue to spiral out of control worse than they are now, and demand for health care will result in rationing of care — just as it has in every other country where that socialized medicine is practiced. We have better now. We deserve better in the future.

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