Republican Patients' Choice Act an attempt at health care reform; but do the authors really get it?

Rep. Paul Ryan (AP Photo/Susan Walsh)

Wisconsin’s U.S. Rep. Paul Ryan, who authored the much-ballyhooed but little-noticed House Republican alternative budget, has teamed with three fellow Republican lawmakers - Senators Tom Coburn (OK), Richard Burr (NC), and Devin Nunes (CA) - to create an alternative to President Obama’s plan for health care reform: The Patients’ Choice Act.

This plan has obviously had much thought put into it, and is an earnest attempt to proffer solutions for dealing with the problems of the cost of health care in this country. The focus on prevention and wellness, for one, is to be lauded and is much needed. As is the recommendation to establish transparency in health care price and quality.

The Patients’ Choice Act is intended to promote universal access to quality, affordable health care without increasing taxes or adding to the national debt; however, it falls short of understanding the economy of health care in the United States and how medical costs impact the average citizen.

According to a press release put out by Congressman Ryan’s office, the newly proposed legislation “promotes innovative, State-based solutions, along with fundamental reforms in the tax code, to give every American, regardless of employment status, age, or health condition, the ability and the resources to purchase health insurance.”

Specifically, the bill would give families $5,700 and individuals $2,300 a year in tax credits to buy health insurance and invest in Health Savings Accounts. Further, low-income Americans would be provided with a supplemental debit card of up to $5,000 to purchase insurance and pay out-of-pocket costs.

This part of the plan is, on the surface, consumer-oriented and innovative. The problem is that the cost of health insurance far exceeds the amounts provided for by the Republican initiative. The $5,700 and $2,300 figures are very close to figures put out by AHIP Center for Policy and Research, a lobby group representing nearly 1,300 insurance companies.

The thing is, the AHIP figures for non-employer-based coverage are about half of what the average annual costs for employer-based insurance are (according to National Coalition on Healthcare). Can that be right? Even COBRA costs significantly more than the averages offered by AHIP.

But say the AHIP figures are correct. There still is the issue of the hefty deductibles and other other out of pocket medical costs consumers are faced with. The bottom line is, the Republican figures just aren’t enough to pay for private insurance. Maybe they are not intended to be; it’s reasonable to expect consumers pay a share of the cost.. However, a tax credit assumes that the original cost will be paid up front, and the pay-off comes in having less taxes to pay. Does the average American family have the money to pay for expensive medical costs up front while waiting for a tax break to come later on?

The Republicans, in their abhorance of a centralized health care system. believe they have devised a plan that is centered on Americans’ “individual needs,” in the words of Rep. Nunes. Senator Burr added, “The Patients’ Choice Act will finally enable Americans to own their health care instead of being trapped in the current system, which leaves people either uninsured, dependent on their employer, or forced into a government program.”

But how will the Patients’ Choice Act enable one to leave their employer’s plan? According to the Wall Street Journal, most Americans with job-based health insurance “would see little more than a bookkeeping change with the Patients' Choice plan.” This is likely right. The cost of private insurance, and the reluctance to exit a plan that may be working for them with doctors they like, make it unlikely that most employees will end their dependence on their employer-based insurance.

It’s that very insurance that’s killing the budgets of small businesses, large industries, and public service sector employers alike. For example, school districts across the country struggle to afford good health insurance for their teachers while containing costs in an environment where state aid to schools is continually being slashed.

The core problem of affordable health insurance is the high cost of medical care, including the costs of prescriptions and medical services. Until those costs are contained, no individuals or families – even with a generous tax credit – will be able to afford either medical care or insurance, and neither will employers.

To containt costs, the Patients’ Choice Act uses the same tired retoric of putting a cap on patient damages in medical lawsuits and improving medical record keeping. These may both be warranted initiatives, but do they truly get at the underlying cause of why American medical costs continue to sky-rocket? Does anyone even know what the underlying causes truly are?

To reign in medical tort reform, the Patients Choice Act calls for “specialized health courts or other state-designated options” which are to be “entirely run by the state, not by the federal government.” Sounds good on paper. But Wisconsin is facing a $6 billion dollar deficit for which the governor is threatening to furlough and lay off state workers. Where is Wisconsin supposed to come up with the money to establish “health courts?” Or California? One can only imagine that most states are having the same budget problems and won’t appreciate the federal government mandating new programs for them to run.

The press release put out by Congressman Ryan’s office states that the proposed legislation would transform health care by “using choice and competition rather than rationing and restrictions to contain costs.” When it comes to fighting for ones life against cancer or a life-threatening heart condition or trying to get an organ transplant for a child or loved one, do we really want to be faced with having to choose between competitive health-care providers? Maybe a single-payer (meaning government run) system isn’t the way to go, but certainly a centralized system of some sort will have more clout in negotiating competitive rates before a health care crisis hits.

What Ryan and his fellow Republicans have done with the Patients’ Choice Act holds potential. It’s likely the most populist piece of legislation to come from Republican lawmakers (absent tax cuts) since the days of Lincoln.

Rep. Coburn is right when he says, “The American people deserve health care reform that will work, not another round of so-called reform that repeats the same failed policies of the past.” But the Patients’ Choice Act, as it stands, threatens to be just that, another failed policy. Unless…

Unless the Republican lawmakers are willing to use the Patients Choice Act as a building block – a starting point - to work with, yes, to negotiate with President Obama and the Democrats, rather than continually fight against them, to create a compromise piece of cost-containing health insurance legislation that both sides can agree on and that truly serves the health care needs of the American public.

And the Democrats are put on notice that they need to do the same. The Patients Choice Act is a serious attempt to work on behalf of the people from a group whose ideology has generally be to work on behalf of big business. It has some important ideas that need to be considered. Both sides need to stop thinking about how to preserve or regain the powerbase of their respective parties and work together preserve and regain the health and well being of the American people.
 

For more info:  Patients' Choice Act summary