Sensible Health Care Reform

It is an oft-repeated mantra presented by Obama and his minions when the subject is health care reform; “Republicans are the party of No!”; “Present me with ideas and I will listen”; (from his State of the Union Speech)  “if anyone from either party has a better approach … let me know”.  Anyone who swallows this line of b.s. should pay close attention to the following.

There is only one proposed bill in existence that the Congressional Budget Office has said would actually lower health costs and that is a bill presented by the House Republicans – and ignored by the President, Nancy Pelosi and most of the mass media.  Jeffrey H. Anderson, the  director of the Benjamin Rush Society, in conjunction with Tevi Troy, has proposed many of the reform measures contained in a “small bill” that reflects many of the ideas that are widely accepted among House and Senate Republicans as well as by many of their Democratic colleagues.

The stated purpose of the “Small Bill Proposal for Sensible Health Care Reform” is “To make health insurance more accessible, affordable, and portable — without increasing government control, jeopardizing the quality of care, or breaking the bank”.  This might be accomplished in seven basic steps.

1.  Cut costs by preventing runaway malpractice lawsuits.  This is anathema to the Democratic party leaders, who reap enormous campaign contributions from the trial lawyers association.  By capping non-economic and punitive damages while still allowing unlimited economic damages to cover financial loss, there would be no increase in government spending and savings to private citizens due to doctors not having to raise their fees to cover “defensive medicine procedures”.  The trial lawyers association would not like to see this happen, for obvious reasons.

2.  Cut costs by allowing Americans to buy insurance across state lines.  There would be no cause for increase in government spending and Americans could shop coast-to-coast for the plans that appeal to them the most.

3.  Cut costs by allowing lower premiums for healthier lifestyles.  This proposal centers on cutting costs to those who eat and drink in moderation, exercise, or don’t smoke.  Currently, Federal regulations prohibit companies from offering more than a 20% discount to employees who make these choices.  There would be no increase in government spending here.

4.  Increase access to health insurance by ending the unfair tax on the uninsured (and self-insured), giving them a tax break similar to that which is already available to those with employer-provided insurance, resulting in refundable annual tax credits of $2,500 per person or $5,000 per family.  Employer-provided insurance with its tax-exempt status, and the rest of the tax code would remain intact.  This provision would mean an increase in government spending of approximately $80 billion and reduced revenues of approximately $120 billion (for refunds of taxes paid).

5.  Provide further help for those who are uninsured and have expensive pre-existing conditions by increasing federal support for state-run or state-organized high-risk pools.  Thirty-five states already have such pools to help those with pre-existing conditions and to assist the remaining states would cause an increase in government spending of approximately $100 billion.

6.  Convert some federal funds into block grants to states and reallocate the savings resulting from reducing the number of uninsured.  Disproportionate Share Hospital (or “dish”) payments presently reimburse hospitals for emergency room treatment of uninsured patients.  A reduction in the number of uninsured (caused by the above proposals) frees up money that could be allocated more efficiently through the block grants.  Beginning with block grants pegged at 75% of each state’s current DSH funding level, reductions of 5% each year until the grants reach the 50% level in Year 6 could result in a savings of approximately $180 billion with no increase in government spending.

7.  Implement additional reforms from the House Republican health bill (Yes, Virginia, one actually does exist despite Democratic denials), such as adopting regulatory reform in the small group and non-group markets, standards for electronic administration, an abbreviated approval [pathway for follow-on biological products, and HSA reforms.  There are no increased government costs and a savings of an estimated $20 billion.

Estimated 10-year totals under this “small bill” reveal $180 billion in costs and 1.1 million newly insured per $20 billion spent, with no deficit spending.  The CBO projections for the Senate Bill from 2014 to 2023 are $217 billion in deficit spending (unless doctors’ pay under Medicare is cut by 21%) and total spending increases of $2.5 trillion (supposedly offset by Tax increases of $1.0 trillion, Medicare cuts of $800 billion, and Medicare Advantage cuts of $214 billion), ending in 260,00 newly insured per $20 billion spent.

A more in-depth analysis of the “small bill” can be viewed at http://www.smallbill.org.

The President appears unwilling to deviate from any of his expressed agenda regarding health care and/or the expansion of big government in general, but it is important to note that some of the mechanics of an incremental approach to health care reform already exist.  If there is any truth in Obama’s recently expressed intent for a bi-partisan approach to achieve gains for the American people in health care reform, then proposals already advanced by “the party of No!” should not continue to be ignored.

The goal of health care reform must be designed to benefit the public, not to further the political fortunes of any particular party or ideological group.