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  • Patients’ Choice Act Features Key Conservative Reform Elements

    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.

    Posted in Obamacare [slideshow_deploy]

    7 Responses to Patients’ Choice Act Features Key Conservative Reform Elements

    1. Pingback: Kaiser Daily Health Policy Report Feature Highlights Recent Blog Entries « Ted DeCorte @ Eclectic Buzz Blog

    2. Harold Bisel, Minne says:

      How would the PCA bill reduce rising medical care costs? How would this bill control fraud in the med system? How would this bill stop unnecessary doctor ordered procedures just to avoid law suits? What would keep insurance companies from low-balling at the start then keep raising rates? Would this bill stop illegals from receiving expensive medical care at the expense of the taxpayers?

      We don't want the Canadian system and efforts to move us in that directions must be stopped.

      Harold Bisel

    3. Bart, California says:

      To paraphrase Moffit's and D'Angelo's web memo from March 16, the tax credit should be small enough that consumers still "have some skin in the game." The PCA doesn't do this for individuals and families whose premium is less than the credit amount.

      The current federal employer tax exclusion is generally worth between 15 and 45 percent of the cost of health coverage. We already know the top end of this range is too high, providing incentives for over-consumption and first-dollar coverage. What, then is the logic behind increasing this to a 100 percent subsidy?

      Even worse, this bill undercuts employer-provided group coverage without providing a well-defined alternative. It "encourages" states to set up health exchanges and associated risk adjustment or risk pool mechanisms to absorb displaced employees, but apparently neither requires nor funds them.

      This bill has no chance of becoming law in the foreseeable future, but if it did the likely result would be more states passing guaranteed issue and community rating laws.

      I'm in favor of reforming the tax exclusion, but not this way. Better to base the credit on a fixed percentage of the insurance premium, and restrict it to coverage that fulfills the pooling function now performed by employer-based group coverage. This would end the regressivity and discrimination without most of the bad side-effects.

    4. Pingback: 15 Reasons Why Obamacare Su-Diddly-Ucks « The New York Groove

    5. Pingback: 15 Reasons Why Obamacare Su-Diddly-Ucks « JoHNBRoDiGaNDoTCoM

    6. Pingback: Morning Bell: Who is the President Calling “Extremist?” | Fix Health Care Policy

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