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January 28, 2014

The GOP Health Care Alternative

Three senators put forward a credible alternative to ObamaCare.

Just last week, we relayed some ideas for what conservative health care reform might look like. As it so happens, GOP Senators Tom Coburn, Orrin Hatch and Richard Burr released their own plan on Monday – the Patient Choice, Affordability, Responsibility, and Empowerment Act. The proposal has two primary elements: repealing ObamaCare (though it would re-implement some aspects of it) and working to restore the consumer – not the federal government – to the center of health care. The goal is to get as close to universal coverage as possible.

To get there, the reform plan boils down to a few elements. All Americans at or below 300% of the federal poverty level who do not have employer-provided health insurance would receive a tax credit for the purchase of insurance. States could then establish an opt-out auto-enrollment program for the remaining uninsured, placing them in private plans with premiums priced at exactly their tax credit. Consumers would have a choice to participate or not, or to buy more or less coverage, free from the bureaucratic mandates central to ObamaCare.

Another element would allow small businesses to pool together to secure better rates on insurance, while states could work to enable the purchase of insurance across state lines. As for those with pre-existing conditions, the proposal would offer a one-time sign-up period for everyone, protect people with continuous coverage when they switch plans, and provide for covering those with higher costs through state high-risk pools.

Currently, ObamaCare prevents insurance companies from charging more than three times as much for older people as they do for younger people, which only drives up the price for everyone. The GOP proposal would ease that by allowing insurance companies to charge older customers a more traditional five times as much, though states could cap that at a lower amount.

Furthermore, tort reform is a key part of the proposal, as is an effort to make prices more transparent. (Ever try to ask what treatment costs beforehand?)

Like the ideas we noted last week, this proposal is a good beginning in the effort to replace ObamaCare. We’d certainly prefer to see even more free market aspects and less government control – this proposal deregulates without getting the federal government out of the health care sector. But we also have to acknowledge that ObamaCare has moved the political baseline for health care policy, and any effort at moving policy back to the Right will require accounting for that reality before changing it.

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