Recently, Rep. Alan Grayson (D-FL) quipped on the floor of the House that the GOP health care plan amounted to: "1) Don’t get sick, and 2) If you do get sick, die quickly." Yesterday, John Boehner (R-OH), the top GOP man in the House, finally unveiled the official GOP plan...and did little to disprove Rep. Grayson.
The GOP plan would allow firms like
WellPoint (
WLP) and
Aetna (
AET) to continue to deny coverage based on pre-existing conditions. It would not offer any subsidies to the working poor to help them get covered, and would not require people to buy health insurance, or for employers to offer it.
It would make it harder for people to sue if they are injured by medical malpractice. The use of contingency fees by lawyers in malpractice suits would be strictly limited. Thus, for example, if the doctor misread your chart and amputated the wrong leg, you would have to be rich enough to pay the $150 an hour than most lawyers charge -- and a case like that would take many hours. After it is all done, damages would be limited to $250,000 for non-economic damages. So a low-wage worker would get far less than someone who has a higher income. Punitive damages would be almost impossible to win.
It would however, allow small businesses to band together to buy health insurance so they could get rates more in line with what large employers pay, which is a useful idea. It would also allow people to buy insurance from companies in other states. These policies would be regulated not in the state where the person lives, but in whatever state the insurance company decides to set up shop in. State insurance commissioners in the states where the policies were sold would have no enforcement power over consumer protection.
Since the credit card industry has done such a bang-up job in consumer protection, the GOP decided that it would apply the same model to health insurance. If in the extremely unlikely chance that this ever became law, look for some small state determined to not regulate the industry at all to become the new insurance capital of the country, just like South Dakota is the leading state when it comes to credit cards.
The plan would offer up to $50 billion in "incentive payments" to states that manage to bring down the number of uninsured, and would offer up to $15 billion to help states establish high risk pools and reinsurance programs. Those figures, however, are not per year, but totals over the next ten years -- or $5 billion a year in incentive payments spread among the 50 states and $1.5 billion per year for support of the high risk pools. With 47 million uninsured people in the country (and rising fast due to lay-offs when most health insurance is employment-based), that is nowhere close to adequate.
It also makes available another area where the wealthy can invest their money tax-free through expanded medical savings accounts. That is not going to help the working poor, the people who might be working two or three jobs, none of which offer health coverage. Few of them are even able to take advantage of the existing tax advantaged savings accounts like IRA’s and 401-k’s. Nice little perk though, for those earning well into the six figures who would like to shelter more of their income.
With health insurance costs rising at well over 2x the rate of inflation over the last 20 years, there is nothing in this bill that would force that to change. The reduction in the number of uninsured people in the country would be minuscule. Recently, a Harvard study estimated that 46,000 Americans die each year because they do not have access to health insurance. That is equal to more than another 9-11 every month.
All in all, this bill would be substantially worse than doing nothing. Doing nothing will bankrupt the country within a few decades.
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