Legislation That Helps, Not Harms

• Ibd
• On 6:36 pm EST, Thursday November 5, 2009

Health Care: House Republicans have introduced their own reform bill. Unlike the Democrats' legislation, this plan would actually keep the promises Barack Obama made in the 2008 campaign.

House Speaker Nancy Pelosi is pushing the Democrats' 1,990-page health care legislation for a quick vote, maybe even as early as Saturday. But it won't cut costs or provide every American with medical insurance.

The GOP's plan, however, will cut costs as well as decrease the number of uninsured. Of course, it will never make it to the floor for a vote during the current congressional term.

At 219 pages -- that still strikes us as being too long -- the Republican bill would improve the health care sector, should it become law, not hold it hostage to system-wrecking politics.

The GOP plan has no public option that's a Trojan horse for a single-payer system, no requirement forcing Americans to buy health care insurance, no massive tangle of mandates on insurance providers that will force premiums higher, no impossibly high price tag.

Instead, the GOP alternative addresses current flaws in health care public policy:

(point V)Caps on jury awards in malpractice cases. A Harvard study found that 85% of medical malpractice lawsuits are frivolous.

Even when they've done no wrong, health care providers are forced to protect themselves from grasping trial lawyers and fortune-hunting plaintiffs. They overtreat patients to cover themselves and pay high medical malpractice premiums to insurers that are supposed to shield them from predatory litigation.

Both carry high costs. A PricewaterhouseCoopers study found that defensive medicine, the practice of ordering unnecessary tests and scheduling excess visits and consultations, adds $239 billion annually to U.S. health care costs that now total $2.5 trillion a year.

Medical costs are also driven upward by the steep malpractice premiums that insurers charge to cover the price of defending doctors in court, paying settlement fees and handing out jury awards.

Naturally, doctors pass their insurance costs on to patients and the insurance companies that pay them to treat their customers.

The solution to these problems would be, as the GOP proposes, limiting noneconomic damages in medical malpractice cases to $250,000 and making it harder for plaintiffs to receive punitive damages. Those policy changes would preclude the need to practice defensive medicine and reduce malpractice premiums.

(point V)Lower health insurance rates. Americans cannot buy individual health care policies from insurers outside the state they live in. This restriction is a drag on competition, particularly in states where there are only two companies, and a source of higher costs.

However, letting consumers buy policies across state lines, which the Republicans propose, would boost competition and bring down premiums as companies battle for customers.

Congressional Budget Office researchers found that under the GOP bill, premiums in the individual market would fall 5% to 8%.

Premiums would also be lower if small businesses and groups of individuals were free to form insurance pools the way large businesses and labor unions do.

Consulting firm Mercer Oliver Wyman suggests that under those conditions, small businesses could cut their health insurance costs by 12% and the number of uninsured, such as the working poor who have no coverage, would be cut by 1 million.

The CBO reached a similar conclusion. It says premiums for small businesses would fall by 7% to 10%. Provisions in the bill, the CBO says, would also reduce large group market premiums by as much as 3%. Overall, savings might be as much as $1,800 a year per family.

(point V)Increase coverage through high-risk pools. The GOP bill would make $15 billion available over 10 years to support states that establish high-risk insurance pools. These pools are often the last resort for those uninsured whose medical problems prevent them from getting their own coverage.

The bill isn't perfect. There's no provision to provide individuals with the same tax breaks that businesses get for buying insurance. But the legislation would expand medical savings accounts, which encourage self-rationing of care. That would bring even further declines in cost due to the inevitable drop in demand.

Opponents might criticize the GOP's new proposal as a set of old ideas. They would miss the point, though.

These are valid ideas the Democrats have opposed for years, not because they won't work, but because they would give Americans more, and the government less, authority over their health care.

Buzz up!