"Republicans Introduce Another Health Care Alternative, What Was Wrong With The Other Four?"
In today’s POLITICO, Rep. Tom Price (R-GA) celebrates the 44th anniversary of Medicare by arguing that “nothing has had a greater negative effect on the delivery of health care than the federal government’s intrusion into medicine through Medicare.” Price joins a long-line of Republicans who have historically opposed a program that has dramatically improved “the health of the elderly population,” increased “life expectancy,” and improved the financial security of millions of seniors.
A recent Commonwealth Fund study found that “compared to people with private insurance, Medicare enrollees have greater access to care [and] fewer problems with medical bills.” Their report adds that this finding is significant, considering that those Americans on Medicare represent a demographic that is more likely to be in poor health and to have lower incomes. Elderly Medicare beneficiaries also reported “greater overall satisfaction with their health coverage” and Medicare is so popular that most Americans support expanding its coverage to individuals aged 55 to 64.
But Price reaches deeper into the reactionary rhetoric of the 1960s, to argue that “the proposal before the House would hand over to Washington nearly every decision that should be made by patients and their physicians” before proposing yet another Republican alternative to the Democratic initiative. The new “Empower Patients First Act” is almost identical to the The Patient’s Choice Act, Commonsense Health Care Reform to Lower Costs and Increase Access and Quality at a Price Our Country Can Afford, Improving Health Care for All Americans Act and Health Care Freedom — which begs the question: What was wrong with the other four bills?
Like it’s predecessors, this legislation would break-up employer-based coverage, endanger the coverage of Americans with pre-existing conditions, and drive-up health care spending:
- “Creating tax incentives for consumers to purchase insurance on the individual market, encouraging states to assist consumers with pre-existing conditions”: This proposal breaks up the employer-pool by encouraging younger workers (who can find cheaper coverage in the individual market) to opt out of their current coverage and purchase insurance elsewhere. The departure of healthy workers from employer insurance pools would drive up average health costs for employer based plans and force workers to opt out entirely. This unravels employer health insurance for Americans who prefer it. Younger, healthier people could find cut-rate insurance on the individual market – as long as they stay young and healthy! Since the bill lacks any adequate consumer protections — like requiring insurers to offer coverage to Americans with pre-existing conditions — insurance companies operating in the unregulated individual market would continue rescinding or denying coverage and increasing premium rates.
- “In order to provide coverage for Americans who have pre-existing conditions, the Republican plan proposes giving states incentives…to establish high-risk insurance pools”: Nationwide, high-risk pools cover fewer than 200,000 people. Often, enrollees face high premiums and are denied benefits for treatments related to their preexisting conditions— the very thing the plan will help. Because these pools will be full of only sick people, covering all high-risk Americans through these pools is likely to be prohibitively expensive. According to the Tax Policy Center, using high-risk pools “to prevent large losses in insurance coverage among the sick and needy could …[cost] on the order of $1 trillion over ten years given projected health care pay-costs.”
- “Republicans are also proposing to expand the individual market by creating pooling mechanisms such as association health plans and individual membership accounts”: In theory, Association Health Plans (AHP) are intended to implement a laudable goal: allow small employers to pool their risk nationally so they can get the same economies of scale and negotiating power as large employers. But in reality, Association health care arrangements would allow businesses with healthier employees to pool risk, while excluding firms with sicker employees.
- “Consumers would also be able to shop for insurance across state lines”: Allowing insurers to sell policies across state lines would allow companies to avoid state consumer-protection laws and solvency requirements. Insurance companies “would have little incentive to continue doing business” under certain state rules which “require that companies issue coverage to all new customers and not set higher rates for people who are already sick.” Companies will charter in states with scarce regulations, and will no longer have to provide mental health parity, cancer screenings, or abide by regulations that “limit the rates that can be charged to higher-cost consumers and that limit who can be excluded for a health plan.
- “The Republican plan also proposes reforming Medicaid and the State Children’s Health Insurance Program (SCHIP) by giving beneficiaries the option of getting a voucher to purchase private insurance”: Republicans would take some beneficiaries out of Medicare and CHIP and leave them in the hands of private insurers (in the individual market). But how would this swap control costs? Legislators had proposed “premium payment” support back in the 90s — that is, subsiding the purchase of private coverage — and analysts have concluded that the only way to control costs is to provide a “premium payment” that depreciates every successive year. In other words, the voucher may start at “100% of the Medicare benefits on average” in 2009, but it will diminish as health care costs increase. According an analysis by the National Academy of Social Insurance of the Breaux/Thomas premium support proposal, federal subsidies would not keep up with growing insurance premiums and could relegate “lower-income beneficiaries to lower-cost and possibly lower-quality plans.”
- “Our legislation is paid for. By requiring a 1 percent annual step-down in discretionary spending, plus other efficiencies”: The Republicans had proposed this “cost saving” measure in their alternative budget. As Pat Garofalo explained, an across the board cut would allow inflation to eat away at vital funding for programs like Head Start, Pell Grants and the entire public health infrastructure, and make cuts without any regard to merit.
- “The Republican plan also addresses the issue of medical liabilities that doctors face”: While medical malpractice reform is an important issue, malpractice costs represent only 0.46 percent of total health care expenditures. Republicans attempt to group the larger problem of practicing too much defensive medicine with liability reform, but as Kate Steadman explains, “the research that has been conducted indicates, for the most part, that defensive medicine has little effect overall and that states with tort reform only have slightly lower rates of spending than those without.” For instance, after Texas passed its landmark tort reform legislation in September 2003, the state continued to grapple with the highest uninsured rate in the nation. As the Houston Chronicle points out, “malpractice issues are a small scab on Texas’ ailing health care system. The cancer is the number of uninsured. Increasing the number of doctors and specialties only does so much good when many Texans can’t afford to make an appointment.”