Patient CARE Act Proposal Falls Short

March 20, 2014

The latest Republican health care proposal falls short of real reform, says Thomas Miller, a resident fellow at the American Enterprise Institute.

The Republican effort to offer a workable alternative to ObamaCare is much overdue, but the party has yet to propose something that will actually solve a health care system that is overregulated and oversubsidized.

Republican Senators Richard Burr, Tom Coburn and Orrin Hatch recently unveiled the Patient CARE Act, their proposal for health care reform. While the bill has some promising elements, it is underdeveloped and does not accomplish any sort of meaningful reform.

  • The bill claims to repeal ObamaCare, but in reality, it offers less than full repeal. ObamaCare's prohibition on limits on the dollar value of insurance coverage remain in the act, as does the mandate that insurers offer coverage to dependent adult children up to the age of 26.
  • On a positive note, the bill repeals ObamaCare's tax hikes, caps Medicaid spending growth and encourages Americans to purchase less comprehensive plans. However, rather than reduce other areas of federal spending, the bill would pay less for Medicare and increase taxes on individuals who have employer-based insurance.
  • How does the bill deal with preexisting conditions? It extends HIPAA protections, ensuring that individuals who move among insurance plans but maintain continuous coverage will not be singled out for new underwriting based on health status.
  • Unfortunately, the bill also offers a one-time open enrollment period that requires insurers to ignore health status, ignoring the risk that individuals would maintain catastrophic coverage solely to maintain continuous coverage, then trade up on coverage levels as their health needs change.

Ultimately, the bill is too focused on political concerns, resulting in a product that is not a principled, long-term health care solution.

Source: Thomas P. Miller, "Why the Patient CARE Act Proposal Is 'Going to Need a Bigger Boat'," American Enterprise Institute, March 10, 2014.

 

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