THE UR'S PATH TO RE-ELECTION:

The Republican Alternative (Peter Ferrara, 11.18.09, American Spectator)

The Republican plan would further reduce costs by enhancing Health Savings Accounts (HSAs), which are themselves a Republican reform fundamentally changing health care by introducing market incentives to reduce costs. Individuals with HSAs keep most of their money for health care in a savings account, earning tax-free interest, with the rest going to purchase a high-deductible, catastrophic insurance policy. The premium cost for such catastrophic coverage, with deductibles generally ranging from $2,000 to $6,000 a year, is much lower than for standard, low-deductible health insurance, allowing the savings in the account to grow quickly to cover the entire deductible. Patients with HSAs are free to use the money in their accounts for any health care, including preventive care, check-ups, prescriptions, dental care, eye care, and the full range of alternative medicine. Nothing could do more to increase consumer freedom of choice and to put patients in control of their own health care.

Money kept in HSAs can be used for health care in later years, or for anything in retirement. So patients are effectively using their own money for non-catastrophic care. That provides powerful incentives to avoid overly costly or unnecessary care and to look for doctors and hospitals that can provide quality care at lower cost, creating real market competition to reduce costs.

The Republican House alternative would allow consumers to use funds saved in HSAs to pay for the catastrophic insurance covering costs above the deductible. Broadly expanding HSAs across the entire health system, including Medicare and Medicaid, would essentially solve the health cost problem.

CBO confirms that this Republican alternative plan would reduce health insurance costs, exactly the opposite of the Pelosi/Obama plan that CBO confirms would increase health insurance costs. The CBO analysis shows that for millions of families health insurance premiums would be almost $5,000 per year less under this GOP plan than the cheapest health insurance under the Pelosi bill.

The real "Nixon to China" moment would come after the Republicans win the midterms and the UR embraces such a plan with the proviso that it be universal.

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Posted by Orrin Judd at November 18, 2009 7:03 AM