Republicans introduce health reform plan that would provide tax credits to purchase health coverage, establish state insurance exchanges

Sens. Richard Burr (R-N.C.), Lamar Alexander (R-Tenn.) and Tom Coburn (R-Okla.) and Reps. Devin Nunes (R-Calif.) and Paul Ryan (R-Wis.) on Wednesday introduced the Patients' Choice Act (S 1099, HR 2520), a counter proposal to Democratic health care reform plans that would create state-based health insurance exchanges and provide U.S. residents tax credits to subsidize coverage premiums, Roll Call reports (Drucker [1], Roll Call, 5/20).

The act would require states to separately establish health insurance exchanges made up of private health insurers through which individuals could pick their coverage. The legislation would provide $5,700 in tax credits to families and $2,200 in tax credits to individuals to subsidize coverage premiums, the Washington Times reports (Washington Times, 5/21). An additional $5,000 tax credit would be provided to low-income families (Budoff Brown, Politico, 5/20). The credits would be funded by taxing employer-provided health benefits (Washington Times, 5/21).

Under the plan, states would be allowed to shift state residents covered by Medicaid into private coverage (Wayne, CQ Today, 5/20). The measure also would establish a system of health coverage auto-enrollment at emergency departments, motor vehicle departments and through employers (Politico, 5/20). The plan does not establish any new government health care programs (Drucker [1], Roll Call, 5/20). According to Politico, the bill's sponsors hope to achieve universal coverage for U.S. residents (Politico, 5/20). According to the bill's sponsors, the plan is budget neutral (Drucker [1], Roll Call, 5/20).

Prospects

Burr said he plans to offer the bill as an alternative amendment on the Senate floor to the health care overhaul bills to be proposed by Democrats on the Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee. Burr said, "We decided to construct what we decided was the best policy for health care. And then, hopefully, it's obvious," adding, "We're going to introduce it to the American people and let them voice an opinion on whether they want real health care reform. ... If the American people want it, we're in the game" (Drucker [1], Roll Call, 5/20).

According to the Wall Street Journal, the plan "has little chance of passage" because of the Democratic majority in both chambers; however, "it reflects some Republican lawmakers' growing dissatisfaction with a bipartisan effort to fix the health care system" (Adamy, Wall Street Journal, 5/21).

Democratic Response

Senate Finance Committee Chair Max Baucus (D-Mont.) said that the GOP plan is "basically what we're doing," adding that the "only difference" is that it would eliminate the tax benefits for employers who provide health coverage. Baucus said, "It would destroy the insurance system in America as you know it" (Washington Times, 5/21).

After Republicans announced their proposal, Sen. Charles Schumer (D-N.Y.) and Health Care for America Now unveiled a plan to work jointly to advocate for a public option as part of a comprehensive overhaul. Schumer and HCAN also released a report that said health insurers have a monopoly over the health insurance market and creating a government-run public option is the only solution to the problem. Schumer said, "It's all the evidence we need that consumers must have a public option," adding, "We must make increasing competition our top priority" (Drucker [2], Roll Call, 5/20).

Medical Rights Act

In related news, a group of congressional Republicans -- including Reps. Mark Steven Kirk (Ill.) and Charlie Dent (Pa.) -- on Wednesday introduced a bill (HR 2516) that would ban the federal government from interfering in private health insurance except in cases of existing Medicaid, Medicare, veterans or military health care. According to the Times, the bill essentially would void Democrats' overhaul plans (Washington Times, 5/21).