Republicans in Congress are making yet another major attempt to reform the health care system, going in a very different direction from the expensive health reform bills proposed by Democrats. Rep. John Shadegg (R-AZ) is set to introduce his Improving Health Care for All Americans Act, which seeks to control costs while promoting greater health insurance portability and choice. The bill offers three main provisions: offer tax relief for those who don’t have employer-sponsored insurance or don’t like their current work place coverage, establish new pooling arrangements for individuals, and facilitate mechanisms for the state to address high cost individuals.
Tax credits – The Shadegg bill acknowledges that those employees who like their workplace coverage can keep it and continue to enjoy tax exclusion on health benefits. However, there are others who don’t like their employer’s coverage or don’t have access to employer-provided insurance. Tax credits are given to these people, allowing them to go out and buy private plans that best suit their needs. This presents Americans with greater flexibility to choose plans that they like and increased affordability of insurance.
Individual Membership Associations (IMAs). – Today’s mobile workforce illustrates one of the disadvantages of employer-based coverage. Every time you change jobs or leave the workforce, you lose your coverage. The concept of IMA put forth in the Shadegg bill would give Americans more choices, greater stability, and the same pooling benefits of traditional employer based coverage. Everyday organizations that people belong to, such as church groups and service organizations, could form IMAs. These IMAs would negotiate with private insurance companies, like employers do today, to offer discounted plans tailored for their members.
Risk-adjustment Mechanisms. – The Shadegg bill aims to encourage and bolster state efforts to develop mechanisms that will address the difficulties facing Americans with high health care costs. Risk adjustment mechanisms, such as high risk pools, are an important feature for a consumer-centered health care system, but should also be mindful to limit taxpayer exposure. A well-designed risk adjustment mechanism gives health plans the right incentives to provide better value to both healthier and sicker enrollees.
The Shadegg bill offers yet another conservative alternative to reform proposals put forth by President Obama and the leaders in Congress. Unlike President Obama’s plan, which depends on centralizing health care decisions in Washington, the Shadegg bill would put personal health care decisions back in the hands of individuals and families. It would address the major challenges facing the current health care system by promoting increased choice, affordability, and access, while placing control over insurance plans in the hands of the real customer – the patient.
This Post was co-written by Julius Chen.