NCPA - National Center for Policy Analysis


January 29, 2010

The Empowering Patients First Act, H.R. 3400, sponsored by Rep. Tom Price (R-Ga.), a physician and chairman of the House Republican Study Committee, would insure more people and cut costs, says Diana Furchtgott-Roth, a contributing editor of Real Clear Markets and an Adjunct Fellow at the Manhattan Institute. 

For instance:  

  • It would insure more people by letting individuals take tax deductions for health insurance premiums that they pay, just as employers do.
  • Workers with employer-paid insurance could retain it.
  • Low-income individuals would be given refundable tax credits in advance to help them pay premiums.
  • States would be required to set up subsidized risk pools for those with chronic conditions who might otherwise be uninsurable. 

The most innovative aspect of the Price bill, according to Furchtgott-Roth: 

  • It allows -- but does not require -- employers to offer a monetary sum to workers so that they can purchase whatever insurance plan they choose in the open market, similar to defined contribution pension plans.
  • Employers would still enjoy the same tax benefit for providing coverage, tax-free to the employee, but workers would be able to choose from an entire range of options, policies that they could carry with them when they change jobs.
  • Now employees are generally limited to one plan, sponsored by their employer, and lose that coverage when they change jobs. 

The contrast with the Democrats' health care plan could not be starker, says Furchtgott-Roth.  Rather than turn the insurance industry into a federally-controlled public utility, the Republican plans would allow all Americans, including recipients of Medicare, Medicaid and the Children's Health Insurance Program, to shop around and purchase health insurance on the open market. 

Source: Diana Furchtgott-Roth, "A New Approach to Health Reform," Real Clear Markets, January 28, 2010. 

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