Republican Health Care Reform: An Overview

Once Senator-elect Scott Brown from Massachusetts is sworn into office, Republicans will have an unstoppable filibuster machine in place (assuming they remain united). It takes 60 Senators to shut down a filibuster. With a caucus of 41, Senate GOPs can kill most any bill on the table. (Budget related items can be moved forward through the reconciliation process with only 51 votes).

Which means when it comes to health care reform, Republicans have a choice: they can kill most any bill or they can help pass reform legislation that includes some of their pet provisions. For much of the health are reform debate it was unclear what was the Republican health care reform proposal. There were plenty of ideas thrown around by various groups of GOP lawmakers, but there was no one generally agreed to set of reforms. To be fair, it wasn’t clear what reform provisions were part of the official Democratic recipe either: liberals had their ingredients; moderate Democrats had ideas of their own.

For Democrats it’s fair to say that somewhere between the bill passed by the Senate and the one passed by the House lies their health care reform proposal. Republicans have their own legislation, the “Common Sense Health Care Reform and Affordability Act.”. While this legislation has never been considered by a Congressional committee (that I’m aware of) based on the the Republican response to President Barack Obama’s State of the Union address by Virginia Governor Bob McDonnell, it appears to be the “official” GOP plan. What Governor McConnel said is that “many of (the Republican’s health care reform) proposals are available online at” As Governor McDonnell was speaking on behalf of the Republican Party, and since the web site he referred to an official Republican Party site, I assume it’s fair to consider the legislation and the web site as the official GOP position on health care reform.

So what kind of health care reforms would Republicans say “yes” to?

  • Require states to operate “qualified” state reinsurance programs and high risk pools to enable individuals with pre-existing conditions to obtain coverage so long as they are “citizens and nationals of the United States.” Aliens legally in the United States would apparently not be eligible.
  • $25 billion would be allocated to the help fund these programs.
  • Premiums could be no higher than 150% of the state’s average individual health insurance premium
  • Eliminating annual and lifetime spending caps on health insurance coverage
  • Preventing carriers from imposing pre-existing conditions on consumers if they maintain continuous coverage.
    • In describing this provision, Republican staff of the Ways & Means Committee describe this provision as extending “existing HIPAA guaranteed availability protections.” Among the extensions is eliminating the requirement that individuals exhaust their COBRA coverage before becoming eligible for insurance under HIPAA.
  • Prohibiting rescissions except in cases of fraud and even then consumers can appeal the decision to an independent appeals panel.
  • Offering states incentives for:
    • reducing “the average per capita premium for health insurance coverage” in the individual and the small group markets.
    • reducing the number of uninsured in the state by specified percentages
  • Permitting states to “contract with a private entity to develop and operate a plan finder website” to provide information on individual coverage available to consumers in that state. These state plan finders are explicitly prohibited from directly enrolling individuals in health insurance plans.
  • Allows small business to come together in Association Health Plans that operate across state lines.
  • Allows individuals to purchase coverage from any health plan licensed in any state. Insurance from a health plan licensed in another state will “still be subject to the consumer protections and fraud and and abuse laws of the policy holder’s state of residence” according to the Ways & Means Committee GOP staff.
    • The rationale for this provision, as stated by those Republican staffers, is that “differences in state regulation of health insurance have resulted in significant variance in health insurance cost from state to state. Americans residing in a state with expensive health insurance plans are locked into those plans and do not currently have an opportunity to choose a lower cost option.”
  • Encourages use of Health Savings Account by allowing them to be used to pay for health insurance premiums, enabling those receiving a nonrefundable tax credit to contribute to an HSA and the like.
  • Capping malpractice awards for noneconomic damages to $250,000 and other medical liability reforms.
  • Eliminates a current comparative effectiveness research initiative aimed at identifying the effectiveness of various medical procedures
  • Providing incentives for prevention and wellness programs
  • These are the primary provisions. There are others aimed at combating fraud and abuse in government health programs, preventing federal dollars to be used for abortions and the like, but these are the core elements related to access and affordability.

    Some of the Republican health care reform bill is relatively non-controversial. Who opposes encouraging prevention and wellness programs? The Republican health care reform proposal’s impact on the uninsured would be minimal, according to the independent Congressional Budget Office. However, the CBO also found that the GOP reform plan would “reduce average private health insurance premiums per enrollee in the United Sates, relative to what they would be under current law- by 7 percent to 10 percent in the small group market, by 5 percent to 8 percent for individually purchased insurance, and by zero to 3 percent in the large group market.”

    My point in describing the Republican health care reform proposal is not to applaud or criticize it (that’ll happen in future posts). Nor is it to imply that this legislation has any chance of being enacted.

    But on the off-chance that both President Obama and the GOP are serious about negotiating over health care reform legislation, it’s useful to know the parameters of the discussion. The Senate bill, with the expected modifications as reported in this blog and elsewhere over the past few weeks, represents the starting point for Democrats. The Common Sense Health Care Reform and Affordability Act represents the starting point for Republicans.

    Let the negotiations begin.

    Health Care Reform and the State of the Union

    Just some quick thoughts on health care reform and President Barack Obama’s State of the Union address.

    Bottom line: he intends to move forward with health care reform, but, given the changed political context after the Massachusetts special election, has no specifics as to how he’ll move forward and what he’ll try to accomplish. Yet.

    The President’s addressed health care reform roughly half way through his speech. That alone indicates that the White House has gotten the message: the American people are focused on jobs and the economy. Health care reform in and of itself is simply less critical now than it was even two weeks ago. This is not to say it’s unimportant. The status quo is unsustainable and if reform doesn’t occur sooner rather than later there will be a heavy price to pay. Nor is it any less critical for President Obama to sign some form of comprehensive health care reform into law. He’s staked a great deal of his credibility and political capital on achieving reform. He has to deliver something.

    Not surprisingly then, the President made it clear he’s not giving up on health care reform. “(W)e must also address the crushing cost of health care,” President Obama said. “This is a cost that now causes a bankruptcy in America every thirty seconds.  By the end of the year, it could cause 1.5 million Americans to lose their homes.  In the last eight years, premiums have grown four times faster than wages.  And in each of these years, one million more Americans have lost their health insurance.  It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.  And it’s one of the largest and fastest-growing parts of our budget. Given these facts, we can no longer afford to put health care reform on hold.”

    President Obama then noted how close Democrats had come to passing health care reform (until the results of the Massachusetts election denied Democrats of the ability to overcome a unified Republican filibuster on their current legislation) and touched on some of the benefits Americans could expect from the legislation.

    But instead of insisting on passage of the Senate version of reform through the reconciliation process or promising to vigorously pursue any specific reform package, President Obama struck a more conciliatory, bi-partisan tone. “Now, there will be many different opinions and ideas about how to achieve reform, and that is why I’m bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week,” he said.

    Next the President again reminded Americans of the importance of achieving health care reform. “I suffer no illusions that this will be an easy process.  It will be hard.  But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough.  So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year.“

    Then it was on to education issues.

    What to make of President Obama’s quick and relatively non-substantive reference to the most critical issue of the first year of his presidency? My take is it reflects the reality that the White House and the Democratic leadership don’t know how to proceed yet – they don’t know what they can get passed or how to go about it. Yes, some members of Congress talk about passing much of the existing Senate version of reform a legislative process known as reconciliation. (what’s significant about reconciliation is that it allows the Senate to pass legislation with a simple majority – 51 votes – instead of 60). But there’s very little political upside in pursuing this course – even if there are enough moderate Democrats in the House and Senate to enable it to happen in the first place.

    One of the key messages independent voters have been consistently telling Washington is that they’re tired of the political games that pass a business as usual in the nation’s capitol. Yes, Democrats can claim Republicans are playing games by filibustering health care reform. But circumventing such a filibuster through reconciliation will look like chicanery to many voters. And that’s an appearance Democrats simply can’t afford. Not after all the backroom deals they’ve cut during the health care reform process to date.

    At the end of the day, I expect Congress to pass health care reform that is far more modest than what Democrats initially hoped to accomplish. And that there will be some Republican votes for a more moderate bill. But to get this done, progressives will need to come to grips with the reality that Democratic majorities are not synonymous with liberal majorities. My guess is that while President Obama meets publicly with his group of “businesses and workers, doctors and health care providers, Democrats and Republicans,” he’ll be calling a lot of liberal lawmakers and explaining basic math. Then he’ll talk about the worthiness of half-a-loaf. And about the need to offer Republicans wins on some issues (think malpractice reform or selling policies across state lines) if there’s any hope of getting support from any GOP lawmakers.

    The State of the Union address is not the place for announcing scaled back ambitions. By acknowledging that there was a need to “begin work” on pulling together a reform package, President Obama was signaling that the reform bills before Congress is not going to be the legislation that winds up on his desk (certainly legislation that has been a year in the making is not something on which one “begins working” upon). But health care reform will be coming. We just don’t know what it looks like yet.

    President Bush Health Insurance Reforms: Going Nowhere

    In his State of the Union address last night, President George Bush offered his vision of health insurance reform. Unlike some of the approaches being considered at the state level, the Bush plan doesn’t even pretend to provide universal coverage.  The centerpiece of the president’s proposal is to provide every American with a tax deduction for health insurance premiums and to offset that hit to the budget by taxing American’s who have coverage costing more than the deduction. He would also redirect some Medicaid funds to the states to support experimentation with universal coverage.

    The concept has a lot of merit. Why should employers get to deduct health insurance premiums, but not those who purchase individual and family medical plans? And why not fund the deduction with taxes on those who have rich benefits many of whom are high income individuals. The current system, in which employees benefit from employer-paid medical premiums on a tax free basis is grossly unprogressive. The CEO of a company, who no doubt is in the highest tax bracket, gets a nearly 50% subsidy on the value of the premium; the clerks in the same company, who pay little in taxes, receive maybe a 15% subsidy — and maybe none. Where’s the justice in that?

    So, while it’s tough for me to admit this (as I am far from being a fan), the president actually put forward some interesting ideas. They would make the system more fair and would bring about 5 million uninsured into the health care coverage system (according to the Administration). But it really doesn’t matter. His proposal is going nowhere.

    The president’s proposal is already receiving widespread criticism among the committee chairs in Congress. And I can’t imagine the Democrats handing the Republicans a victory on health care reform when what’s on the table is so distant from the universal coverage they seek.

    It would be nice if Congress would simply make health insurance premiums deductible for individuals and family who buy their own medical coverage. That would be a huge boon to the growing number of self-employed in this country. But even that’s a long shot. So while the federal debate will be interesting and is important for framing issues, the reality is, the president’s proposal is going no where.