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Questions Plague GOP Health Plan

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WASHINGTON, Dec 26, 2003 (United Press International via COMTEX) -- With GOP members of Congress and the Bush White House gearing up to push legislation addressing the insurance needs of the nearly 44 million U.S. citizens without health coverage, questions are being raised about the policy concepts favored by Republicans.

While there are a multitude of unanswered specifics about the measure still being drafted by administration officials and congressional Republicans, GOP aides in the Senate told United Press International that a number of ideas floating around Washington for years are expected to make up the backbone of a final bill.

Among those ideas are tax credits for the purchase of individual or family health coverage along with new programs that allow small companies to pool resources into large purchasing groups that bring down costs.

Cost estimates for the proposal are expected to top out at $80 billion over a decade.

Although voters have long associated the issue with Democrats, GOP leaders are convinced they can change that perception with the proposal.

Each of the major Democratic candidates have put out policy plans, but the successful passage of the GOP-backed Medicare prescription drug bill earlier this month gives Republicans a platform from which they hope to convince voters they are the party of healthcare.

"We are intent on riding the Medicare wave and making sure voters know that healthcare is a top issue for the party," said one ranking Republican Senate aide.

The politics of the issue aside, there are a number of concerns about such a proposal. These include not only how it would be paid for under the budgetary pressure resulting from the immense federal budget deficit, but also questions about the effectiveness of the concepts involved.

Even those who support the general idea of tax rebates and small business purchase pooling say that any GOP bill must be designed with key issues in mind that are often left out of such proposals.

Joe Antos, a healthcare policy fellow at the conservative American Enterprise Institute, told UPI that while these programs can be used to address systemic problems in the U.S. healthcare system, they must be designed properly.

He said that along with market reforms to ensure consumer access to information and greater consumer protections, a tax program would need a refundable credit that is almost immediately accessible for those that fall low on the income scale. Without this, the impact any tax rebate proposal on the poor would be minimal.

A refundable credit, a often-discussed idea among Republican lawmakers, would not be terribly effective in addressing the needs of those who don't have the money for coverage in the first place.

In addition, Antos noted that tax programs do nothing to help the poorest of the poor who do not pay taxes. Such people would still have to be served by indigent healthcare programs.

Linda Blumberg, a healthcare policy expert at the liberal-centrist Urban Institute, said that existing tax credit proposals tend to involve a relatively small amount of money that by and large is not enough to make a significant impact on the high costs of health insurance to individual purchasers.

She and Antos also agreed that the issue of those excluded or priced out of the non-group health insurance market because of pre-existing health problems, age or other reasons are typically not addressed by these proposals.

Nevertheless, Blumberg said that a tax credit could be designed that would have a real impact, if it addressed these needs.

"Both the upside and the downside will come out of the details," she told UPI.

She was also highly critical of proposals for new programs to allow for pooling small business insurance purchasing.

In June, the House approved a bill to encourage the use of so-called "association health plans" and a similar measure has been introduced into the Senate by moderate Republicans.

Blumberg argued that there is no reasons to believe that such programs would significantly expand insurance coverage, adding that her own models have shown that the likely impact of association health plans would be only to shake up the marketplace as firms look at other ways to manage their health insurance risk.

"It is not a policy to pursue as if it was going to expand insurance coverage," she said.

Even within the GOP there is disagreement about whether the plans will work with some members of congress arguing that they would expose consumers to insurance scams by largely exempting insurers from state insurance regulations.

Ultimately, Blumberg and other critics of the type of plans GOP lawmakers are examining say the proposals are motivated more by politics than good policy ideas.

"We know a good deal about what has the potential to work and what will be less effective," said Blumberg. "I am somewhat a skeptic of saying that these kind of policies, that have been bandied about more toward the right for years, is really the other party taking over or co-opting health insurance policy because I feel strongly that these kinds of policies, at least in the way they have been discussed, have relatively little chance of producing a significant increase in overall coverage."

Antos, along with many economists, argue that what is really at issue is the more fundamental problem of the way people look at healthcare coverage.

In some ways this is being addressed by changes that they say underscore the need for more fundamental reforms to the nation's healthcare system.

Those changes involve the evolving state of employer-sponsored healthcare, the way most U.S. workers get coverage.

For decades people have been shielded from seeing the real costs of healthcare through an insurance-based payment system that is built on relatively high premiums, low deductibles and low out of pocket payments. That is changing.

Employers have realized they can get their costs under control by shifting more costs to employees. This results in higher out-of-pocket spending for workers.

Healthcare policy experts agree that likely result is that consumers will gain a better understanding of the real costs of healthcare.

Although health insurance is unlikely to be a dominant political issue in the 2004 election, these changes are expected to make it one in the near future.

Leif Wellington Haase, a healthcare expert at the liberal Century Foundation, told UPI that the uninsured have long been a politically powerless class, but that changes in the way people are insured will align the forces of the middle class and uninsured in political action.

"I don't know if it is an issue you can win on politically in 2004, but it is going to be one of the absolutely pivotal issues in the next three or four years," said Haase. "It has always been the bailiwick of foundations like ours and people who want to do the right thing more than a potent political issue, but it is going to become a more potent political issue as out-of-pocket (insurance) costs keep going up."

Copyright 2003 by United Press International.

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