On November 3rd, the GOP made it’s new health care reform bill available for review. The bill contains many elements of H.R.3400 which was the Republican-sponsored health care bill submitted in the House in July. This new bill is being submitted as a substitute for Pelosi-care or H.R.3962.
The legislation is considerably smaller than the liberal bill it is intended to replace. The Democrat bill is just under 2,000 pages while this new GOP proposal weighs in at a paultry 230 pages. Good for me, as I wasn’t sure I could do another 2,000 page snooze-fest.
A quick summary of the bill is that it does seem to preserve state and individual rights, keep government out of health care and meets Americans desires to have health care be made more affordable and accessible. The bill makes provisions for:
- Lowering premiums
- Restricts malpractice lawsuits to prevent ridiculous rewards
- Limits the percentage of awards that can go to lawyers
- Provides incentives to states to hit premium reduction targets
- Provides for the purchase of health insurance from across state lines
- Allows small businesses and groups to form “associations” in order to get the savings that only large companies or organizations usually can
- Gives flexibility to provide rewards to those who adopt healthier lifestyles
- Enhances HSAs (health care savings accounts) to allow that tax-free money to be used for premium payments
- Increased access
- Establishes high-risk pools to guarantee access to health care fro those with pre-existing conditions
- Prevents insurers from canceling a policy except in the case of fraud
- Eliminates lifetime spending caps
- Allows young adults to stay on their parents health plans until age 25
There are no federal tax provisions in the bill, but there are at least $50 Billion in new costs for the incentive funds to the states. The bill simply states that the money comes from “the Treasury” so one would assume this is to be paid out of existing funds. The CBO will have to analyze if the bill saves $50 Billion or more during the same time period making the bill both cost and deficit neutral.
There bill does allow states to tax the new small business and small group associations for policy premiums. It does not mandate it and I’m not sure why it’s necessary to even mention it. If the states wanted to tax small group insurance policies, I believe they could – with or without federal legislation.
An interesting cost-reduction item in the bill is that it will allow young adults to be covered by their parents policies until age 25. The 18-25 crowd is the healthy, but often uninsured population that could help spread the cost of the older and more-expensive crowd. Young adults without children tend to forgo insurance due to the cost. This could help moderate premiums for the rest of the pool, but it remains to be seen if a majority of parents would want to keep paying for the health insurance of their grown children.
Another premium reducer is the allowance of HSAs to be used to pay insurance costs. I believe this allows HSA owners to purchase individual policies tax-free and those policies would not be tied to employment, making them fully portable. This would also allow for the HSA to be used to pay premiums in the case of job loss.
The bill limits the availability of the high-risk pool to only legal residents of the United Statesand limits the spending of federal funds on abortion to only cases of emergencies, rape, and incest.
The bill is fairly-conservative and a much easier read than the Democrat bill, but it remains to be seen if a Republican bill can get out of committee. So far, every Republican health care initiative has been tabled in committee with the liberal leadership denying that it even exists.