Did the GOP capitulate on healthcare?

May 27, 2009

ambulance– James Pethokoukis is a Reuters columnist. The opinions expressed are his own –

You can’t beat something with nothing” often passes for political wisdom in Washington. In 1994, Republicans defeated Bill and Hillary Clinton’s healthcare reform plan with pretty much nothing — well, at least with nothing positive.

Republican congressional solidarity, along with help from business group attack ads and the Clintons’ own political miscues, were enough to doom the landmark legislative effort. Back then, “No” was sufficient.

But 2009 is not 1994. A “Just say no” strategy seem laughably insufficient this time around. Economic anxieties are much higher, the Democrat president more popular, the Democrat-controlled Congress more committed and aggressive.

Want even more evidence of the changed economic and political landscape?

Just take a look at the 248-page Patients Choice Act, a comprehensive GOP healthcare reform plan drafted by Senators Tom Coburn and Richard Burr, and Representatives Paul Ryan and Devin Nunes.

A big feature of the plan calls for redirecting the $300 billion-a-year tax exclusion for employer-based health benefits into refundable tax credits to purchase private plans.

Low-income families would be subsidized so they could also buy private health insurance. The theory here is that people act more like cost-conscious consumers when they have to select and purchase their own health insurance rather than pay premiums indirectly through their employers via lower wages.

While the bill doesn’t stand a chance of passage with the Obamacrats in charge, it does reflect a recognition by congressional Republicans that if they are to derail or significantly modify Democratic healthcare efforts, they need a positive and serious policy rejoinder of their own.

“I think it is a good, bold, free-market alternative,” says James Capretta, an economist at the Office of Management and Budget under President George W. Bush and now a fellow at the Ethics and Public Policy Center.

“Broadly defined, this is where the conservative coalition can plant a flag and begin engaging in the debate.”

But is the bill really a choice rather than an echo? The indisputable conservative credentials of Coburn, Burr, Ryan and Nunes have not prevented some free marketeers from scowling and some liberal policy wonks from cackling after taking a look at the legislation.

Michael Tanner, a healthcare expert at the libertarian Cato Institute immediately tagged the plan “Obamacare Lite” and claimed it would “increase regulation, mandates and government control over the healthcare system.”

At the same time, liberal healthcare blogger Ezra Klein was almost rapturous: “The core elements of this plan…make it the same type of plan Democrats are offering….And it’s further evidence that the argument over health reform is narrowing, rather than widening. And it’s narrowing in a direction that favors the Democrats.”

Both Tanner and Klein have read page 5 of the bill’s summary and this sentence in particular: “Many states have led the nation in finding comprehensive healthcare solutions for their citizens, including the well-known, bi-partisan achievement of universal healthcare through a private system in Massachusetts.”

Now many on the right consider that state’s 2006 healthcare reform, led by former Governor Mitt Romney, to be a big-government system which mandates every resident buy health insurance.

Even worse, in their view, is the Connector, a “state exchange” that Tanner describes as “a super-regulatory body, adding new mandated benefits, restricting consumer’s choice of plans, and adding both regulatory and administrative costs to insurance.”

Indeed, the Coburn-Burr-Ryan-Nunes bill explicitly states that it “will utilize state-driven exchanges to facilitate real competition between private plans and give Americans — for the first time — a choice of health care plans.”

But no worries, say the bill sponsors who have been reassuring worried conservatives privately that their version of a state exchange is similar to the one found in Utah which acts more like a matchmaker between insurers on one side and individuals and small businesses on the other than a big regulatory body.

When pressed on whether the Coburn-Burr-Ryan-Nunes plan increases the role of the government in healthcare or diminishes it, Tanner can conclude only that “it’s mixed”.

Now all this brings to mind what a high-ranking Republican House member asked me earlier this spring: “So what should we do about healthcare? More health savings accounts?”

Given both the member’s snarky tone and the context of our preceding conversation, this is what I’m pretty sure the high-ranking House Republican actually meant by those questions: “We are going to get our collective heads kicked in if we don’t come up with a strong alternative to Obamacare. Health savings accounts alone ain’t going to cut it. We need to raise our game, and fast.”

And part of that “game raising” means accepting that it won’t be easy to budge voters.

Not all American families are going to prefer high-deductible HSAs — previously the Republican healthcare policy of choice — especially when one of the supposed selling points of these plans is the ability to invest money from accounts into the battered stock market.

And certainly voters are not ready for a hypermarket approach such as the one advocated by libertarian economist Arnold Kling. He has argued that “real” health insurance would pay only for treatments that are “unavoidable, prohibitively expensive and relatively rare.” Everything else would be out of pocket.

And that “game raising” also apparently means adopting some of the Democratic rhetoric on healthcare to appeal to more centrist voters.

In addition to using the Massachusetts plan as an example rather than the plan from conservative Utah, the authors employ a liberal-flavoured critique of America’s healthcare system:

“The health care system in America is broken. Costs are rising at an unacceptable rate — more than doubling over the last 10 years, which is nearly four times the rate of wage growth. Too many patients feel trapped by healthcare decisions dictated by HMOs. Too many doctors are torn between practicing medicine and practicing insurance. And 47 million Americans worry what will happen to them or their children if they get sick.” Ted Kennedy couldn’t have said it better.

The big risk to Republicans is that if they adopt the language and critique of Democrats, the public will miss the policy subtleties and start viewing the Dem and GOP approaches as more less the same. That could give further momentum to Democratic healthcare efforts and actually bring about the outcome Republicans are trying to avoid.

15 comments

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It is just not true that a majority of citizen have a problem with health care. This family has none thanks to the Boston, MA retirement system. There are many more like us who have nothing to gain by reforms only to pay more.
Yes, there are some people, many by their own fault, who are not insured. Just stop making this as Europe or Canada a complete “Nanny” state, educate people to be responsible and not wardens of the state. By all means emulate Mass.,
children get free care anyway. Remember : First do no harm.

Posted by Kurt D Stottmeier | Report as abusive

The only problem with America’s health care system is the cost, otherwise we have the best system of health care in the world.
Why is the cost so high?
The cost of medical care is high because of government regulation, AMA control, court cases and a third-party -pay system. The third party-pay-system insulates the recipients from the cost of the added procedures, tests and monitoring that is mandated by court cases and regulation.
I just can’t see how more government involvement is going to change that. Likely either the Republican plan or the Democrat plan will increase the cost and complicate the system to a greater extent. The best way to kill a good thing is let people in power dictate how it is run.

Posted by Craig Coal | Report as abusive

There is no simple answer, nor a simple fix to the problem of healthcare cost. But let me put forth some items:
1)The US is the best in fixing problems not preventing them. These procedures are by far the most costly and lucrative
2)Other nations may impose quotas or avoid giving the same level of treatment. The US will spend thousands of dollars keeping a death-ready patients alive (we fear death too much)
3)Provider system – a system of provider referals, pharma kick-backs; arrogance amongst the profession that declares itself above corruption
4) Lack of clear cost-figures per procedure.
5) Inneficiencies within clinics and hospitals

Those are just a few to get us started.

Posted by Sebastian | Report as abusive

U.S. healthcare is more expensive than anywhere else because of the vested interests, bureaucracy and inefficiencies of the insurance, drug and health management companies.

This is the so-called free market in action right now –nearly 50 million people without health insurance in the world’s richest nation.

The philosophical arguments go round and round but there is a simple economic one. To stay competitive, the United States needs to have every citizen as healthy (and as educated) as possible.

Posted by John | Report as abusive

Well said Craig Coal. You hit it right on the head! I’d like to hear what a practical solution to this mess might be. What are your ideas on that? (never heard it said better! have you ever thought of running for office? :)

Mark

Posted by Mark D | Report as abusive

Craig Coal must have gotten his advance copy of Frank Luntz’s, 28-page memo, “The Language of Health Care,” written to help Republicans undermine health care reform efforts. As the debate over health care reform progresses, it was inevitable we’d see some pretty deceptive advertising from the right. But what they’ve come up with so far tells us quite a bit — some conservatives, left with no credible options, are just making up nonsense.

There’s a project, for example, called “Patients United Now,” organized by the same outfit that sponsored Sam “Joe the Plumber” Wurzelbacher’s anti-Employee Free Choice Act efforts. This group, Americans for Prosperity, has a new television ad featuring a Canadian woman who said she came to the United States to be treated for brain cancer, because in Canada, she would have had to wait six months to see a specialist, a delay that would have killed her.

To hear the woman tell it, Canada’s system is a dystopian nightmare, in which the government forces taxpayers to “wait a year for vital surgeries,” and bureaucrats restrict access to medicine and treatments. She concludes by telling the viewer, “Now Washington wants to bring Canadian-style healthcare to the U.S., but government should never come in between your family and your doctor.” She encourages Americans, “Don’t give up your rights.” The message of the ad is completely wrong. This is consistent with the larger trend. Blue Cross Blue Shield of North Carolina is spending millions launching a campaign in opposition to reform, and the message is wildly misleading. Rick Scott’s Conservatives for Patients’ Rights have ads up, and they’re no better.

So “this is where the conservative coalition can plant a flag and begin engaging in the debate?”

A debate is the last thing they want. Politically speaking, they want to crush health care reform, and especially any moves toward single-payer for the same reason they did in 1993: once enabled, the populace would embrace it as much as they did Social Security and Medicare, which would further strengthen Democrats’ consituency. Of course, we can’t underestimate the influence of the hundreds of potentially lost billions that buy lots of mansions & yachts for HMO execs, so there’s that, too. No, this isn’t a debate. For the insurance industry, who wrote the so-called “Patients Choice Act” for the Republicans, this is a war. At stake are billions in profits for them. For the rest of us, what’s at stake are the very lives of people who are already priced out of the American healthcare system.

Posted by getplaning | Report as abusive

“At stake are billions in profits for them. For the rest of us, what’s at stake are the very lives of people who are already priced out of the American healthcare system.”

In one sentence you have boiled down the difference between the republicans and hopefully enough democrats with sufficient spine or health left to finally make true health care a reality for all Americans. Lets only hope that we can get it done this time. There may not be a next time, because by then the rest of the world, nearly every single country on earth, will have left us behind.

Posted by sg[ | Report as abusive

I do hope that people realize that we need a Chevrolet Malibu or Honda Accord and not a Cadillac Limo health care system. We already have a Cadillac system that costs more to run than we can afford. Health care needs to be indexed to costs in 1966 to 1970 when it was affordable and did a good job.

Without indexing the system the reform is DOA.

Posted by f belz | Report as abusive

Sorry, forgot another comment.

Funny to hear the naysayers, the streets of Canada and England must be littered with dead bodies.

I do hope the Republican party fights the reform. Maybe we can put the final nails in the coffin and bury it.

Posted by fbelz | Report as abusive

If Pethokoukis thinks the Democratic and Republican plans are very similar, I question whether he has read them.

Democratic plans: require individuals to enroll in insurance; impose any mandates on employers; require a minimum benefit package; federalize insurance regulation; expand Medicaid or other public insurance; micromanage health-care decisions from Washington; and bankrupt the federal government.

The Coburn-Burr-Ryan-Nunes plan does NONE of that, and is built on individual choice of insurance, instead of being premised on government and employer control.

Posted by Charlene | Report as abusive

What the Heath care industry needs is to get rid of Insurers, who set the prices of just about everything, all so they can make the most money of course, why else would they go into insurance? If they wanted to help people they would have went into Med school.
You want a radical idea for reforming health care?
Nationalize Casinos, State Lotto’s go towards each states health program, and put Americas gambling vice to work keeping Americans healthy in a national “FREE” health plan. How many casinos launder money for gangs anyway? And where is all the states Lottery money going? Certainly not for schools, and try getting a state lottery audited, just try, i dare you.
The benefits:
1. More jobs in Casinos and the web of industries supporting those casinos like Spa’s, Food, Transport, ect. Who wouldn’t go to a casino more knowing even if you lose, your not really losing.
2. Without insurers in the loop, prices can be set for procedures that don’t gauge anyone.
3. Doctors pay wouldn’t be effected at all, and the free market will hold sway as better doctors would still get better pay based on performace.
4. Malpractice would be handled differently, saving much money for hospitals and doctors alike.
5. Jobs in the healthcare industry are projected to grow – this would ensure the money needed.
6. The ease of financial burden on families, rich and poor.
7. The small handful of people who would be upset over this, screw em.
No one should make money on the ill and sick except those who care for them- screw health insurers, they been screwing us for decades.
And Casinos have always been a hub for underworld activity, like Prostitution, drugs, and money laundering; besides, only Mafia types want to make money on the vices of their fellow human beings.

To me this is nothing but a win, win, win for the entirety of Americans, and the small amount of people who will be upset? Well, at least they’ll have health care.

Posted by C.D. Walker | Report as abusive

Kurt

I can speak from experience. My wife and I both work. We have six children and we can’t get insurance because we “make too much”. Get that. We work overtime hours to make ends meet and that overtime, even though it’s not steady, is counted against us.

This so called health care system is not serving the public at all.

The reason is simple. You can’t have anything resembling decent health care if you approach it from a financial perspective.

The market place has it’s value. But there are some things, like your health, your life, your education, that should not be subject to market forces. Because doing so puts your life/health as a secondary priority after money.

We need an HMO system, such as Europe and Canada has that gives everyone healthcare, but restricts it so it does not go over 10% of GDP. We all want the best health care and we all want to live forever, but we cannot afford it. That is why other countries have long lines, they only have the health care they can afford, or willing to pay for.

It seems clear and simple how their sytem works and how ours works. Theirs: everyone gets as much as the country can afford. Here the lucky get as much as they need. The problem is the lucky, are becoming fewer by the day.

Posted by scott | Report as abusive

Kurt-
I am very happy YOU have insurance, but since YOU have it, how can you know the plight of those that don’t? Especially since you have it through your retirement, back when companies actually gave benefits like that all the way through retirement.
You said
“Yes, there are some people, many by their own fault, who are not insured”

How is it a persons fault if an Insurance company charges so much for health coverage, the person cannot afford it?
How is it a persons fault if an Insurance company will not insure them because of a previous condition?
Hos is it a persons fault if an Insurance company decides not to pay their bill for some technicallity?
How is it a persons fault if an Insurance company makes their plan so complex, a person has to hire a specialist just to understand what is, and isn’t covered?

Why are you defending an Industry that continually lies, extorts, denies coverage, and uses the great people of this country?

Posted by C.D. Walker | Report as abusive

The real reason healthcare is so expensive is because healthcare companies decided that we should pay more to increase their shareholder value and executive pay. How can so many of these companies tell us that over the past years that healthcare costs would climb anywhere from 7% – 17% and then have their stock prices soar from less than $10 per share to some as close as $100 per share? It’s quite obvious where the money went. Look at UnitedHealth Group Inc. Chairman and CEO William McGuire’s 2006 compensation. He received $1.6 billion in unexercised stock options. The Wall Street Journal reported that the timing of McGuire’s stock options, when UnitedHealth stock was at its lowest so he would benefit as much as possible raised the possibility that they had been backdated. UnitedHealth Group’s medical loss ratio for 2005 was 78.6%. That means that UnitedHealth retained for its own intrinsic uses, including profits, 21.4% of premiums paid. Profit for 2005 was $3.3 billion. For that performance, CEO McGuire receives $1.6 billion in unexercised stock options. Take a look at other healthcare stock prices and executive compensation and you’ll see the same pattern.

Posted by Dwayne | Report as abusive