In contrast to H.R. 3962, the Congressional Budget Office (CBO) finds that the Substitute would reduce average health insurance premiums ( by 7 to 10 percent in the small group market and 5 to 8 percent in the individual market) and would reduce the federal deficit by $68 billion over ten years.

A Targeted Approach
In style and substance the “Republican Alternative” is a dramatic contrast to the House Democratic leadership approach to health care. It is incremental as opposed to comprehensive. Instead of pursuing a “Big Bang” solution to the various problems of the health care system, embodied in a bill designed to overhaul the entire health care sector of the economy, it is a targeted, step by step, approach to resolving specific health care issues while minimizing disruption of existing health insurance arrangements.

In a conspicuous contrast to H.R. 3962, the Substitute addresses the medical liability problem, provides for real restrictions on taxpayer funding of abortion, and amends current law to enhance the flexibility of health savings accounts.

Insurance Market Reform
In the course of the national debate, the White House and the congressional leadership evolved their rhetoric, calling for health insurance reform rather than health care reform. In fact, the central problems facing ordinary Americans are often rooted in the discrete problems of state health insurance markets, including access to coverage for those who are sick ( Pre-existing conditions” ) and the need for more rational pooling arrangements to spread health care costs. Under Section 101 of the Substitute, states would be required to address these specific problems, and would be given specialized funding ($25 billion) for the creation of high risk pools or risk reinsurance programs to guarantee access to coverage for those suffering with pre-existing medical conditions. The Substitute would also guarantee portability of insurance coverage and protection for pre-existing conditions, prevent unjust cancellation of insurance, while eliminating annual or lifetime caps on insurance coverage.

Enlisting the Creativity of Federalism
Under Section 111 of the Substitute, states would get special funding ( $50 billion) to adopt reforms to expand coverage and reduce the numbers of the uninsured, as well as control health care costs. States could pursue a variety of market reforms and adopt new information systems that would facilitate an ease of access to coverage (allowing auto enrollment in employer coverage with a right to op out) and providing comparative information on health plan choices. As a condition for getting federal funding, the states would have to agree to meet federals goals to reduce the numbers of the uninsured and to slow the growth in health care costs within the private sector. In sharp contrast to the House leadership bill, for example, the Substitute does not crowd-out existing private health insurance through an expansion of public programs, including welfare programs like Medicaid. In the main House bill (H.R. 3962) Medicaid expansion would impose an unfunded mandate on the states, and eligibility for Medicaid would be increased up the income scale to 150 percent of the federal poverty line ($33,000 for a family of four), a provision that would guarantee a crowd out of private health coverage.

Promoting Competition
There are 1300 health insurance companies in the United States, but there is often little competition within the states. State health insurance markets are often artificially high priced, driven by special interest and provider driven mandates and excessive regulations. The result: millions of Americans are price out of the health insurance markets, and choice and competition are undercut by state policy. Under Section 221 of the Substitute, Americans will henceforth be able to buy health insurance anywhere in the United States. Health insurance, like most other goods and services, will be available through interstate commerce, but the Substitute provides that policyholders will still enjoy the consumer protection and anti-fraud and abuse laws of the state in which the policyholder resides. This is a large and consequential change. According to researchers at the University of Minnesota, millions of Americans could secure affordable coverage as a result of the intensity of such competition. In every other sector of the economy, Americans can get what they want, and pay what they want to pay, for goods and services anywhere in the country. They should be able to do the same in health care.

Next Steps
While the Substitute makes significant and consequential changes in the health insurance market- focusing on the persistent problem of pre-existing condition exclusions and portability issues- it falls short in dealing with the most significant problem in health care policy: the federal tax treatment of health insurance. Major legislation to effect such tax changes, expanding coverage for millions of Americans, has already been introduced by Rep. Tom Price (R-GA), Rep. Paul Ryan (R-WI), Rep. Devin Nunez (R-CA) and Rep. John Shadegg(R-AZ).

If there is one area where there is an overwhelming consensus among economists, liberals and conservatives alike, it is that complete reform of private health insurance markets requires reform of the federal tax treatment of health insurance. If Americans cannot get health coverage through the job, then they get no tax break at all on the purchase of their health insurance, forcing them to pay as much as 50 percent more for the same package of benefits they would have paid for if they had gotten their health insurance at the place of work. This unfair tax policy not only undermines the access of millions of Americans to affordable health care, but it also fuels higher health care costs. By reforming the tax treatment of health insurance and providing for individual tax relief, Congress would take a huge step toward expanding private health coverage for millions of Americans, giving individuals choice of coverage, leveling the playing field, promoting personal ownership and portability of health insurance policies, while reducing the burden on taxpayers who today provide free care to the uninsured in the most expense place on the planet: the hospital emergency room.

Today at 2pm the House Rules Committee will meet to consider the rule for H.R. 3962 , the Affordable Health Care for America Act. As of this morning 104 amendments had been filed with the Rules Committee for consideration. Republican’s have filed 87 amendments and Democrats have filed 17. The debate in the Rules Committee and a final vote could continue well into this evening.

The rule being debated today will not only cover HR 3962 but will also apply to HR 3961, the Medicare Physician Payment Reform Act, also known as the Doc Fix. This is a procedural gimmick that allows the costly Doc Fix bill to be combined with H.R. 3962 after the bill passes the House. This allows Congressional Leaders to avoid a stand alone vote on Doc Fix in the Senate. A few weeks ago, a $247 billion dollar Doc Fix bill failed in the Senate with 13 Democrats opposing ending debate on the bill.

Also included in the amendments filed with the Rules Committee is an Amendment by Congressman Brad Ellsworth (D-IN) in an attempt to provide a compromise so that no federal funding would be allowed for abortion services and all Americans would have access to at least one plan that does not cover abortions. This language is not strong enough for many pro-life groups, yet it may allow for enough of the democrats in the House Pro-Life Caucus to support the compromise. If a compromise is reached that allows Pelosi to satisfy pro-life Democrats it will be included in the Rule and not receive additional floor debate or a stand alone vote by Members not on the Rules Committee.

The House will convene at 9am tomorrow morning and begin debate on the rule. It is anticipated that it will be a closed rule, meaning no additional amendments can be offered on the House floor. If the rule passes then Members will immediately begin 3 hours of debate on the health care bill.

Both Leader Hoyer and Speaker Pelosi have indicated that a vote on the “doc fix” will not occur before Veterans Day.

In 1948 the United Kingdom sent a leaflet to every home in the country stating that the newly created National Health Service would provide everyone with “all medical, dental and nursing care. Everyone – rich or poor, man, woman or child – can use it or any part of it.” Today’s NHS, however, has created a far different reality.

“We are seeing a healthcare system that is rationing people’s care by waiting lists, that is relying on people dying on waiting lists so that they don’t have to have their care funded,” said Helen Evans, President of Nurses for Reform, a pan-European network of nurses dedicated to consumer-led reform of British, European and other healthcare systems around the world. “We have a government who are allegedly trying to work down our waiting lists and they think it is good that somebody will be seen within 18 weeks of referral to a specialist.”

Rationing care is the only way that nationalized health systems like the NHS can keep the growth of costs at a manageable rate. Heritage’s Ted Bromund:

A centralized system incentivizes people to be more concerned with managing the system than with managing their jobs. And when their job is making life and death decisions, that’s a recipe not just for failure, or even for expensive failure. It’s a recipe for inhumanity.

House Speaker Nancy Pelosi just unveiled a hulking 1,990 page House health care bill (H.R. 3962). The latest product, which dwarfs the 1,342 page Clinton Health Plan of 1993, is the latest evolution of the House process, which started with H.R. 3200. The House Speaker made a number of general comments, saying that the legislation would lower costs for American families, enhance the solvency of the Medicare program, and add 36 million Americans to the health insurance rolls.

On the crucial question of financing, the Speaker made a point of saying that the bill is fiscally responsible and comes in under the $900 billion target set by President Obama, and would not expand the deficit. Of course, the Congressional Budget Office has not yet issued a formal “score”- or estimate- of the final product. So, it is hard to determine how, or if, the legislation would bend the health care cost curve downward, as President Obama has promised as a key ingredient in health care reform.

The House Speaker and the rest of the Congressional leadership want to fast track the legislation, and get it up on the floor for a vote as early as next week, if possible. Meanwhile, health policy analysts, economists, Congress watchers and ordinary citizens, will have limited time to examine the bill and make their own judgments. Taxpayers need to do their part. Here are some suggestions:

1. Check the Details for Yourself. The bill is now posted. You can find it at fixhealthcarepolicy.com. Congressional leaders were literally working on this bill late into the night before unveiling it this morning. At 1,990 pages, reading this will be an arduous task. But it will affect 300 million Americans and overhaul one sixth of the American economy. It is hard to imagine any piece of legislation having a bigger impact on one’s personal life, let alone the national life, of the country. Vigiliance, as Thomas Jefferson warned us, is the price of liberty.

2. Keep an Eye Out for Budget Gimmicks. Rest assured that there is already evidence that the Congressional leadership is going to resort to shell games and budget gimmicks to make the bill look like it doesn’t add to the deficit. This will be evident in how the bill is structured; it appears that they have decided to front load the revenues in the first five years, and run surpluses in the first five years, and put off the costs until the second five years, and then start running the deficits. So, while this might meet the temporary requirements of the first ten year Congressional Budget Office (CBO) score, it does not mean that the bill would really start to bend the spending curve downward, or that it will not contribute to the already devastating deficits Congress and the Administration have already incurred.

3. Pay no Attention to Words, Check the Actions. Congressional Leaders say a lot of things. But taxpayers need to pay close attention to what they do. It is evident that they are already breaking their promises to the representatives of the doctors and the pharmaceutical companies. Recall that they promised the doctors a permanent fix to Medicare payment. But, according to the October 29th Politico Pulse, now they have taken it out of the bill, and are going to do offer it in separate legislation. This is exactly what the Senate leadership tried and failed to do last week, in order to reduce the apparent cost of their health care agenda, and run up the spending on a separate bill to keep the Senate health care bill “deficit neutral.” Since the House leaders have decided the take Medicare payment fix out of the House bill, they will attempt to run the same play, and add the huge cost (approximately $250 billion over ten years) to the deficit on a separate track. This may work in the House, where the Congressional leadership commands huge majorities; it will not work in the Senate. The doctors will be played as pawns, once again, in the congressional liberals’ budget shell game. In any case, if they take health items out of the bills and add them to the deficit, the taxpayers continue to lose big time.

4. Don’t Trust New Promises. Also according to Politico Pulse, the House leadership has decided to cut drug payments in Medicare between $125 to $150 billion, as opposed to the $80 billion cuts they agreed to with the pharmaceutical industry. That broken promise is combined with a decision to impose price controls on Medicare drugs, and do away with private sector negotiation. This was, of course, the inevitable result of the creation of a universal drug entitlement. Seniors can expect drug rationing if such a provision is signed into law; not right away, but inevitably. Perhaps other K Street lobbyists will learn from this experience.

5. Don’t Depend on Old Promises. The President and Congressional leaders have made a litany of high profile promises: no middle class tax increases; you can keep your health plan if you like it; there will be no interference with your doctor-patient relationship; no funding for abortion or illegal immigration; the health care costs will fall on a future downward curve; we are going to cut Medicare Advantage plans but not Medicare benefits. These are all empty promises, and undermined by House and Senate legislation.

6. Forget Competition. House leaders praise the “ Public Plan” as a force for competition. It won’t, of course; and that is precisely why prominent “single payer” advocates in the House and Senate, champions of a government monopoly, are its strongest supporters. The new bill would force the new public plan to negotiate private rates with doctors and hospitals, and not be pegged to Medicare rates. If that’s true, congressional liberals are then right to ask : “what is the point of the public plan?” In fact, of course, the bill would not really sell out the Lefties. It will be a legally advantaged stalking horse for a single payer system. Even though they claim there is a level playing field for the public plan and the private health plans, that was clearly not true in the earlier versions of the House bill, where the taxpayers assumed the risk.

This is the next phase of the big debate. Both the House and Senate bills largely retain the same character: more control to Washington, less personal freedom.

Photo courtesy of Congressman Rob Wittman (R-Va)