A sharply different national health-care plan was introduced in Congress the other day by a group of Republicans - including Utah Sen. Orrin Hatch - as an alternative to the Clinton health package. It deserves a serious look for several reasons.
First of all, the proposal would offer a wider range of consumer choices, both of doctors and insurance plans. It would not require a huge federal bureaucracy and would contain a minimum of red tape.Significantly, the Consumer Choice and Personal Security Act would not try to reinvent the entire health-care system, as the Clinton package seems to do. In fact, the plan - originally proposed by the conservative Heritage Foundation - resembles the health program already used by the nation's 10 million federal employees for the past 34 years.
Under the plan, people would be required to buy at least minimum health coverage with an annual deductible of $2,000 per family. People could still participate in group plans required of employers or they could shop elsewhere for the kind of coverage and cost they wanted. Persons who failed to buy insurance would lose their personal exemption claim on federal income taxes.
Workers who wanted to buy their own insurance would receive the cash value of company health benefits as wages. If they got a better deal, they could simply pocket the difference. Each fall, federal workers have the opportunity to switch insurance plans.
This kind of competitive pressure has kept insurance premium increases for federal workers to less than a third of private employer plans over the past 15 years.
Part of the cost would be covered by a sliding scale of tax credits based on income. Consumers would get a 25 percent tax credit for each $100 spent on health care, including insurance premiums, up to 10 percent of their income. For families that spent more than 10 percent of their income on health care, the tax credits would keep rising - as high as 75 percent.
The credits would be refundable. For example, if the tax credit exceeded the taxes owed, the difference would be paid to the taxpayer.
While the GOP proposal would put more emphasis on personal choice and initiative and offers alternatives to working people, it does seem to have some weaknesses when it comes to purchasing coverage for the unemployed and low-income workers.
The program does call for switching some Medicaid funds to a new state program for assisting people with incomes below 150 percent of the poverty line. But Medicaid funds already are inadequate to meet federal mandates and Congress wants to limit Medicaid spending even further.
Still, the plan is appealing because it emphasizes tax credits instead of higher payroll taxes.
The latest plan joins three other health-care proposals before Congress as alternatives to the Clinton plan. As Congress tries to combine the best elements of each, it should try to preserve freedom of choice while limiting cost as much as possible.
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