Political Hotsheet
By

Stephanie Condon /

CBS News/ July 30, 2009, 12:35 PM

New GOP Health Bill Promotes on Tax Incentives

(CBS)
Members of the Republican Study Committee are putting forward their own piece of legislation for health care reform, a summary of which was provided exclusively to CBSNews.com's Washington Unplugged.

While Democrats are focusing on creating something like a government-sponsored health insurance plan and regulating the health insurance market, the Republican "Empowering Patients First Act," which Rep. Tom Price (R-Ga.) will introduce tomorrow, instead promotes the individual insurance market as well as employer-based markets. Instead of focusing on regulating private insurers, the plan would in fact give them more freedom to work across state lines. Republicans say the plan will be paid for by reforms of defensive medicine, creating a more efficient health care system, and overall reductions in non-defense government spending.

"Liability reform has to be one or the hallmarks of a bill," Price told CBS News investigative correspondent Sharyl Attkisson today on Washington Unplugged. "We make certain we pay for our bill by making this a priority."

Expanding Coverage in Employer-Based and Individual Markets

According to the summary, the bill aims to make health care accessible to all Americans by creating tax incentives for consumers to purchase insurance on the individual market, encouraging states to assist consumers with pre-existing conditions, and promoting the employer-based insurance system that is popular with many Americans.

"It's imperative each and every American have the access to health coverage that they select," Price said. "The way you do that is through the tax code to make it financially feasible."

The Republican proposal would extend the income tax deduction on health care premiums to those who purchase coverage in the individual market. By contrast, several others -- ranging from Republican Sen. John McCain to Democratic Sen. Ron Wyden-- have proposed eliminating the deductions all together; that idea, however, has remained unpopular.

In the Republican plan, low-income consumers would also be eligible for advanceable, refundable tax credits, provided on a sliding scale, to purchase coverage in the individual market.

In order to provide coverage for Americans who have pre-existing conditions, the Republican plan proposes giving states incentives, such as federal block grants, to establish high-risk insurance pools. Comparatively, Democrats have proposed regulating insurance companies to prohibit them from denying coverage to people with pre-existing conditions.

To promote the employer-based health insurance system, the Republican plan proposes giving small businesses tax incentives for auto-enrolling employees in a plan. Many companies already auto-enroll their employees. The plan also calls for allowing workers to define their own contributions to an employer-sponsored plan. Employers would als be encouraged to offer discounts for healthy habits through wellness and prevention programs.


Republicans are also proposing to expand the individual market by creating pooling mechanisms such as association health plans and individual membership accounts. Consumers would also be able to shop for insurance across state lines. They would be able to obtain more information about different plans through state-based health plan portals the Republican plan proposes creating. However, the portals would simply provide information, unlike the Democrats' proposed health insurance exchange, which would be a marketplace for comparison shopping.

Medicaid and Medicare

The Republican plan also proposes reforming Medicaid and the State Children's Health Insurance Program (SCHIP) by giving beneficiaries the option of getting a voucher to purchase private insurance. Mr. Obama, in fact, wants to lessen encouragement for private insurer participation in government-run programs like Medicaid and Medicare -- he has proposed eliminating subsidies for private insurers to participate in Medicare Advantage.

The Republican plan also reforms Medicaid by dictating that states must cover 90 percent of those below 200 percent of the federal poverty level before they can expand eligibility levels under Medicaid and SCHIP.

Republicans and Democrats agree the Sustainable Growth Rate (SGR), a formula Congress created to keep Medicare costs under control, needs to be reformed. Without reform, doctors could face a pay cut in Medicare reimbursements of about 20 percent. The Republican plan would rebase the SGR and create two separate conversion factors for primary care and all other services.

Cost Containment

Republican and Democratic ideas about health care reform perhaps differ most substantially on the issue of cost containment. Most of the reforms proposed in the bill, the summary says, would be paid for by decreasing defensive medicine; savings from health care efficiencies; reducing waste, fraud and abuse; and an annual one-percent non-defense discretionary spending step down.

The plan touches on Mr. Obama's proposal to further implement comparative effectiveness research (CER) as a means of reducing waste, which is very controversial. CER attempts to use research and scientific evidence to conclude which health care treatments are most cost effective. The president already instituted the idea through the the stimulus package, which created the Federal Coordinating Council for Comparative Effectiveness Research to coordinate CER across the federal government.

The Republican health care proposal would require that none of the suggestions from the Council for Comparative Effectiveness Research be finalized unless done in consultation with and approved by medical specialty societies. It would also establish performance-based quality measures endorsed by the Physician Consortium for Performance Improvement (PCPI) and physician specialty organizations.

The Republican plan also addresses the issue of medical liabilities that doctors face -- something Democrats have not addressed. It would establish in each state administrative health care tribunals, also known as health courts, and add affirmative defense through provider established best practice measures. It would encourage the speedy resolution of claims and caps non-economic damages.

Price said today on Washington Unplugged that the August recess will give Americans the chance to compare and contrast Republican and Democratic plans.

"If we go home over August and talk to the patients of America, we wil have a better product in the fall," he said. "The American people will select solutions that will put them in charge," not the government.

Click here to watch today's full episode of Washington Unplugged.
© 2009 CBS Interactive Inc. All Rights Reserved.
57 Comments Add a Comment
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Graywalker says:
I've been reading over this bill - get the text from http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3400ih.txt.pdf - and it is DESPICABLE.

More Republican "Feed the Rich and Kill the Poor" mentality. Your Private Physician can now be paid with Tax-free money from a Health Savings Account! PLUS, you can put more money into it! Tax Shelters for ALL.
I'm trying to write an impartial summary of what the bill does... but dang... so far I am just disgusted - and I am only on page 43 of 268.
It gives a $2,000 tax credit to people under 200% of Federal Poverty line, plus $500 for up to two dependents.
Rapes the HIPPA laws with exemptions.
... and those paltry tax credits can not pay for your insurance if it covers abortion.
Talk about FORCING your religious opinions on everyone else. So much for Freedom and Empowering patients. Oh, well, just not "THOSE" patients.
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Graywalker says:
I find most people are just plain confused about what is going on.
Universal Coverage does not equal Government Run Health Care. Universal Coverage means getting everyone who can possibly afford it some form of Health Insurance, whether that is Private Insurance through their employer, Private or Public Insurance through the Health Insurance Exchange or Medicaid/Medicare or VA Coverage.
The Public Option would be Government Run Health Insurance, like Medicaid. You still choose your doctors, your doctors and you still chose your care.
The H.R. 3200 Bill Increases your choices, Prevents a lot of the Rationing that Private Insurance does NOW and will lower premiums across the board.
Stop the Lies. http://www.nowpublic.com/user/519918/assignments
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MarkEGreen says:
Folks opposed to universal healthcare seem to only object when it might apply to the 18-64 year old population segments. This happens to be the only profitable segment to insure. No one seems to complaint when state and federal programs are extended to the most expensive segments of society (65 years and over, 0-17 years old, disabled, underprivileged, and/or Veterans. These are ?single payer programs? (governmental). Why do many continue to fight to let private insurance companies carve out the only profitable segment to get rich on? The ?profit margin? associated with this segment would help pay for the rest, if we can capture it. We do not need a socialized system. We do need universal coverage (or at least a public option)from a privately run, non-profit, single payer system that pays providers based on a fee-for-service basis. The money is there and it can be done sustainably if we establish and maintain some ?means adjusted? personal responsibility applied to every single person.

Mark Green MD
www.OurHealthReform.com
MarkGreen@OurHealthReform.com
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proudmilvet says:
Socialism, Marxism, Whatever. It Would Still be an Improvement over anything the Republicans Offer!!
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pasmalltown says:
TO monitutonka July 29, 2009 2:31 PM EDT

If you were truely born in 1944 then somewhere in those 65 years you should have heard about the "sweet" health care package that Congress has - not just the Democrats, but Republicans and Independents AND all of their respective staffers. It's no wonder no one in Congress is worried about health care reform, they have a health care package covers care for just about any condition, procedure, drug, you name it. It's also the reason why no one in Congress is particularly concerned about acting on health care reform before they take their August recess. Like Alfred E. Newman once said "What? Me worry?" - They ALREADY HAVE IT ALL! Not to mention that this perk follows them into retirement as well.........
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two-cats says:
This bill sounds like basically more of the same where insurance accountants make decisions about our health care. I have insurance and had a difficult time even seeing a doctor with my hand fractured, wasting money on nurse practitioners. Americans are not getting good medical care. It's become a farce!
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ibsteve2u says:
"encouraging states to assist consumers with pre-existing conditions"

lollll...gee, with the continued flight of jobs due to Republican free trade policies yielding every more cash-strapped states, all ya'll folks with pre-existing conditions better start saving up for your own cremation should the Republicans get their way.
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beaumuff replies:
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The flight of jobs was signed by your beloved Clintstone. China gave Obama a good thrashing this week for his spending habits. But Bill is still getting money from it for the "Clintstone Foundation".
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zonkzilla says:
The Republicans are right on!
De-regulate all corporations in the US and let them do as they please while offering them huge tax cuts on profits. Corporations will always do the right thing and would never do things to give America the shaft so they can make more money
The Republican "hands off corporations" policy under Bush worked so well and has given us such a great economy I wonder why they didn't think of it sooner! LOL
Republicans - bought and paid for puppets of the wealthy robbing us and giving to the rich.
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grabandgo says:
Why isn't anyone talking about the price of drugs, or the salaries and bonuses the drug company exec's get.
THIS IS A BIG PART OF THE PROBLEM.
You can buy drugs in Canada for 1/2 of what we pay here, and they still make a profit.
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brianp55 says:
Once again the Republicans' professed distaste for government programs is manifest in this collection of disjointed proposals which they are attempting to peddle as a comprehensive health plan. The free market is a wonderful thing, but how many times do we have to be victimized by an absence of regulations and half-measures before we learn that somethings have sufficient scope and impact on our lives that they MUST be controlled by the government? These assinine measures being put forth by the Repubs will never work. This program must be orchestrated at the level of the national government.
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