The whole plan fits on this little card!
Some reporting from Politico on the Republican health care alternative [PDF] reveals that it is not sponsored by any Republican leaders. Not exactly a strong vote of confidence. The legislation, which hasn't been priced by the Congressional Budget Office, relies on tax credits that don't begin to approach what is needed to provide families with insurance, and takes steps -- like slowing comparative effectiveness research -- that would increase the cost of health care. Even worse, and typical of GOP arguments, it suggests deregulating the insurance industry. (I know, it worked so well for finance!). What does that mean in practice? Mitch Berger explains...[I]in 2007 a Rutgers University study, "Mandated Health Insurance Benefits: A Critical Review of the Literature" which considered CAHI’s work, among many others, found the following, "Despite exhaustive research, little compelling evidence exists that state health insurance mandates do, in fact, have a significant impact on" the cost of health insurance.... Insurance companies keep costs down by using their volume-based bargaining power to make agreements with doctors, hospitals and other healthcare providers to get lower rates than any individual buyer could ever achieve. But insurers operating from one state may have a difficult time, on their own, bargaining in states where they have relatively small market presence. It is unlikely that an insurer could ever get a doctor or hospital in Massachusetts to agree to the same fee schedule that is acceptable in Idaho. Even Medicare, the largest single "player" in the healthcare market, hasn't figured out a way to pay the same reimbursement rate to all health care providers across the country. It would seem like the only way for insurers to offer cheap insurance across states lines would be to offer less comprehensive and effective coverage--which, if this proposal goes through, is exactly what would happen.When Democrats accuse Republicans of not offering an alternative policy, the GOP will cite this effort. But the half-baked plan won't save money, increase coverage, or improve the health care system for most Americans. Conservatives can say that Democrats are giving handouts to the insurance industry, but at least the mandate bargain has a quid-pro-quo: better, fairer, cheaper coverage for all Americans. Republicans offer an even better deal to insurers: We'll take off as many constraints on your behavior as we can, no strings attached.
-- Tim Fernholz
