New legislation introduced by Sens. Tom Coburn (R-OK) and Richard Burr (R-NC) features several important conservative principles for health-care reform that would allow free-market solutions to take root in the broken U.S. health care system, and give patients more decision-making power with their health care dollars.
A corresponding bill also was introduced in the House this week by Reps. Devin Nunes (R-CA) and Paul Ryan (R-WI). It’s the first health-care reform package that has been introduced in the current Congress. Several Democratic congressional members are expected to introduce their versions of health care reform in the next few weeks.
As Galen Institute President Grace-Marie Turner and Joseph Antos with American Enterprise Institute note in The Wall Street Journal, the legislation “provides a path to universal coverage by redirecting current subsidies for health insurance to individuals. It also provides a new safety net that guarantees access to insurance for those with pre-existing conditions.”
By restructuring the tax treatment for health insurance, the plan would give every taxpayer direct assistance to buy private health insurance, and end the inequities that plague the current system. The bill would shift the $300 billion annual tax exclusion for employer-based health benefits toward refundable tax credits for families and individuals. Families would get $5,700 a year and individual consumers would get $2,300 a year to purchase private plans and invest in health savings accounts (HSAs).
Low-income families would receive a supplemental debit card worth up to $5,000 that would help them pay for health coverage and out-of-pocket medical bills. They’d also be incentivized to make the most of their health care dollars since the remaining balance on their card would roll over to the next year. The expected expansion of private health plans would reduce the dependence of many uninsured Americans on the hospital emergency rooms for routine care, saving American taxpayers billions of dollars.
“The combination of the refundable tax credit and debit card gives lower-income Americans a way out of the Medicaid ghetto so they can have the dignity of private insurance,” Turner and Antos add.
According to The Washington Times, “Consumers would be able to keep their current coverage, and there would be no requirement to carry coverage, according to aides of the bill sponsors. Consumer protections would be put in place to make sure insurers offer coverage regardless of age or health, and a review board would penalize insurers that cherry-pick healthy patients, aides say.”
The bill also gives the states more flexibility and direct oversight to create health reform plans that meet standards provided by Congress, The Washington Times reports. There are also provisions to pay for preventive measures like vaccines and incentives for states to reduce chronic disease rates.
More importantly, the bill omits the option of a government-run health insurance plan, which health policy experts have argued would create market conditions that lead Americans into a single-payer health care system.
