Today, Rep. Paul Ryan (R-WI) and Sen. Tom Coburn (R-OK) unveil the Patient Choice Act, their alternative to President Obama’s health care reform initiative. Using Sen. John McCain’s (R-AZ) health care plan as a foundation, the new plan proposes taxing the full value of employer health benefits, issuing (inadequate) refundable tax credits — of $2,290 per individual or $5,710 per family — and expanding the use of Health Savings Accounts. (DOWNLOAD A SUMMARY OF THE PLAN HERE AND HERE)
States are encouraged to “establish rational and reasonable consumer protections” by forming State Health Insurance Exchanges to give Americans a choice of “different” private “health insurance policies” and issue standard benefits, offering “coverage to any individual regardless of age or health.”
The plan privatizes the health care system without controlling health care spending. Employers will react to the elimination of the tax exclusion by dropping some Americans from their employer-sponsored health plans and the Republicans build an inadequate safety net to catch the newly uninsured. Americans will have the option of purchasing coverage in the new State Health Insurance Exchanges, should the state choose to establish it. But here, the same problems that plagued McCain’s health care plan are also evident in this proposal. The Republicans protect private health insurer’s monopoly over coverage, but provide no safety net or affordability measures.
Americans can choose a private health insurance plan from the State Health Insurance Exchanges, but that doesn’t mean they’ll be able to afford it. The Republican proposal allows private plans to charge sicker Americans higher rates for coverage. While they include European-style “non-profit independent board “ that “would penalize insurance companies that cherry pick healthy patients while rewarding companies that seek patients with pre-existing conditions,” they do nothing to prevent higher prices based on sex, age, occupation, or medical condition. To finance these higher prices, Americans can rely on the meager tax credits or money they’ve stashed away in a Health Savings Account.
All in all, the plan is dead on arrival. The idea here is to strengthen the private insurer’s monopoly over coverage while doing very little to lower overall health care spending. It’s an alternative steeped in reactionary ideology and political purpose, not a viable solution to the health care crisis.