What Would Republican Health Care Reform Look Like?

Edit: I see a few people have linked to me since Obama’s little debate with the House Republicans in which he backed up the point I’m making here, that his health care plan is:

similar to what many Republicans proposed to Bill Clinton when he was doing his debate on health care.

That’s the point I was making with this post as well. But some people have apparently taken this post as some sort of evidence of Obama’s nefariousness – as proof that he’s selling out. pm317 wrote on Hillaryis44 that people should, “Tell your bluest of blue friends who are still supporting Obama to read this little piece…” I think they should read this piece – but it stinks of partisanship to presume any Republican suggestion is wrong.

This piece points out that Obama has adopted much of the Republican framework for dealing with health care – picking up on the work of liberals such as Jacob Hacker and Peter Orszag. This framework was broadly endorsed by John Edwards, and then Hillary Clinton, and then Barack Obama during the campaign. The plan Obama is pushing attempts to combine the best elements of the conservative Republican plans with the goals and certain important elements of liberal alternatives. As a liberal, I acknowledge that this plan is modest – tinkering even – but this is its strength rather than weakness.

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[digg-reddit-me]Yesterday, the Republicans released their health care plan. However, as Ezra Klein points out it isn’t an actual plan to fix health care as much as a plan to get people to stop asking them what their plan is:

The bill is framed in terms of Republican attacks on the Democratic bill, not in terms of its own aims or methods. Which is fine, and to be expected. If I were a Republican, I wouldn’t spend my time crafting a health-care reform plan, either. Republicans don’t have the votes to pass a bill, and they know it.

So what is the Republican approach to health care reform?

In an interview with the German weekly Der Spiegel, Charles Krauthammer gives a typical response, lecturing Obama:

On health care, the reason he’s had such resistance is because he promised reform, not a radical remaking of the whole system.

Though this is a common claim by right wingers attacking Obama, it clearly isn’t true. Obama’s health reforms take great pains to preserve the current system – and is indeed based largely on two conservative attempts to reform health care in the past. The hope of liberals is that this reform could establish a structure: health insurance market with a public option, that could gradually be opened up to the rest of the population if it was successful. But that isn’t what we’re talking about now.

Given that his criticism of Obama’s health care position is that it is “a radical remaking of the whole system,” you would think Krauthammer would offer a few conservative measures. But if that is what you think, then you have misunderstood the right wing. Krauthammer proposes to entirely tear down the current system: “It is absolutely crazy that in America employees receive health insurance from their employers,” he says, and proposes we gut this system by eliminating the tax break for health insurance and eliminate the prohibition on interstate insurance (which would effectively strip any regulation from insurance companies as the state with the least regulation could attract these companies in a race to the bottom…) By any standard, and whether you agree with them or not, these are radical measures that would completely remake our system of health insurance – and they were also the two cornerstones of the proposal by the McCain campaign.

What Krauthammer either doesn’t know or attempts to elide is that Obama’s health care plan has two prominent historical predecessors: Richard Nixon’s proposal in 1974 and the Dole-Chafee bill sponsored by the Republicans as an alternative to Bill Clinton’s approach in 1993. If you want to figure out what Republican health care reform might be, this is where to look. One of the key things to realize when looking at these plans is that we currently have a hybrid system: with the elderly, veterans, and the poor receiving government-provided health insurance; many of the employed receiving employer-provided health insurance; and those left out either without health insurance or using the much more expensive and less stable individual health insurance market.

1974: Nixon’s Plan

At the crest of the liberal era, Richard Nixon attempted to reform health care. He called his plan CHIP, or Comprehensive Health Insurance Plan, and its goal was to solidify the hybrid system that existed. He proposed expanding eligibility for Medicaid, expanding Medicare to cover prescription drugs, subsidizing the poor to get insurance, incentivizing employers to provide health insurance, and eliminating discrimination on the basis of preexisting conditions.

Specifically, Nixon’s plan included:

• A form of the Indepedent Medicare Advisory Council called the Professional Standards Review Organization, both being independent technocratic bodies composed primarily of doctors which would be charged with ensuring quality care while “helping to bring about significant savings in heath costs,” to use Nixon’s phrase. (Under Obama, this group would be significantly checked by Congress, and Obama has specified one way that excess treatments could be minimized – by compiling medical knowledge about best practices into a non-binding database.)
• A commitment that health insurance would “cost no American more than he can afford to pay,” in Nixon’s words, which specifically meant subsidizing health insurance for the poor who could not afford it and were not provided it through their employers.
• A commitment to build “on the strength and diversity of our existing public and private systems of health financing” and to harmonize “them into an overall system,” as Nixon said.
• The banning of discrimination on the basis of preexisting conditions.
• The standardization of a basic level of health insurance including setting maximim out of pocket costs per year and setting a minimum level of what would be covered.
• A federally issued “Health-card” which would be “similar to a credit car” and “be honored by hospitals, nursing homes, emergency rooms, doctors and clinics across the county” and would include “identity information on blood type and sensitivity to particular drugs.” (Obama’s plan contains no such thing, probably to avoid concerns of federal overreach and the hysteria which accompanies talk of a national identification card.)

One of the great regrets of Ted Kennedy’s life was that he did not take the deal Nixon offered him on health care. It’s also noteworthy that Nixon at this point was insistent on strengthening the employer-provided health insurance system and the government-provided health insurance system. He also pushed the idea of HMOs which Bill Clinton’s plan was later demonized for encouraging as well.

1993: The Dole-Chafee Bill

In 1993, some Republicans believed they needed to come up with an alternative to Bill Clinton’s health care plan (in contrast to the, “Just Say No” approach advocated by Will Kristol at the time, and again today) – with 20 Republican Senators eventually introducing to great fanfare the Dole-Chafee bill. This bill was flawed and politically impossible to get through Congress given the many interests it offended – from labor to the elderly to big corporations. This was because it’s main goal was to undermine the employer-provided health insurance system and to a lesser degree the government-provided health insurance system. The Republicans saw these as distancing individuals from the cost of their health care decisions and thus as two of the main drivers of increasing costs – though they did not acknowledge or attempt to fix any of the problems which made the individual health insurance market untenable for most. This bill included:

• An individual mandate enforced by a penalty imposed on those who did not comply.
• A government voucher to purchase health insurance for individuals to up to 240% of the poverty line. (Which is more generous than the Senate Finance bill which only offered subsidies for families up to 200% of the poverty line.)
• A cap on how much health insurance could be deducted as a tax credit (similar to what the Senate Finance Committee proposed recently, which Republicans denounced as raising taxes.)
• The removal of the tax credit for all private health insurance plans that did not provide a “federally guaranteed package of health care benefits.” (Which is more radical than anything Obama is proposing – and a greater reach of the government into the private sector.)
• The elimination of discrimination on the basis of preexisting conditions.
• Financing through cuts in Medicare Part B and the limits in tax credits discussed above.

“Obamacare”

Compare the above to the plans now circulating in Congress and backed by Obama.

They have many of the same goals:

• reducing the growth of health care spending;
• eliminating the holes in our insurance system and insuring the uninsured;
• eliminating abuses by the health insurance industry.

They have some similar mechanisms to achieve these goals:

• regulation of health insurance industry;
• individual mandate;
• subsidies for those who cannot afford insurance;
• technocratic panels.

The health care reforms being proposed today are based on the same framework as the two Republican plans of the past with one main exception: they provide a mechanism to allow the individual market to work more effectively. The health care reforms today attempt to preserve the current system – which is deteriorating year by year as more and more people are priced out of health insurance – while alleviating the worst problems and providing a separate and regulated market in which individuals could choose between different health insurance models.

While both the Nixon and Dole-Chafee bills sought to change the health insurance industry through pure government regulation and intervention. The Democratic proposal working its way through Congress now adds two elements – one from the left and one from the right. They propose creating a Health Insurance Exchange – a market for health insurance. On this exchange, one could choose a publicly-run insurance plan.

The model the Democrats are working on now clearly owes a great deal to these two Republican attempts at health care reform. It’s a shame that Republicans have now taken to demonizing Obama’s plan on many of the very grounds that would necessarily be at the core of an actual conservative attempt to tackle health care.

[Image by Civil Rights licensed under Creative Commons.]