Committee For Community Involvement

By Congressman Paul Ryan

 

The president and the Democrats are giving the American people a false choice. We must either choose a public plan option with all the bells and whistles and all the promises- in the rhetoric of: " you like what you' got, you can keep it. We just want more choice and competition. We just want to keep those insurance companies honest"- accept the status quo. They say there are no other options. But they' wrong. There are other ways to fix the problems in health care.

 If we do go down the path toward a public option, it will inevitably, mathematically, actuarially, become a government-run monopoly. When the government is put in the position to compete against the private sector, the government is both the referee and the player in the same game.

 It' a stacked deck against which the private sector cannot compete. The private sector has to pay taxes. It has to pay for salaries and benefits. The private sector can' dictate to the provider network what it' going to pay. We' hearing that this public plan option will base its payments on Medicare, with maybe a modest increase. But keep in mind that Medicare underpays providers by 20 to 30 percent. It is simply a question of when, not if, a public plan option, if set in place, completely displaces the private sector. At least under the status quo, you can fire your insurance company. If the only insurer is the government, you' stuck.

We believe that we have to go to the American people with a better way forward. Sections A through D in Title 1 of the Kennedy bill cost a trillion dollars and buy insurance for 16 million people. That' about $62,500 per person over 10 years. And that' just one piece of one title of the bill. The Kennedy bill will cost $4 trillion over 10 years. What we' on the doorstep of doing is creating an entitlement that will rival Medicare. No matter what kind of package is cobbled together to pay for it in the first 10 years, there is no way it' ever going to match the actual cost of the new program. This is a huge problem. It is accelerating the tipping point in America, where more people are dependent upon the government for their livelihood than they are upon themselves.

We already have a little over 40 percent of Americans who are " taxpayers," people who receive payments from the government in excess of their income and payroll taxes. We' dangerously close to becoming a social welfare state similar to Europe. When society goes down that road, it loses sight of liberty and becomes more concerned with security- both economic and other forms. When a country becomes a social welfare state, its society stagnates. Standards of living go down. Creativity, innovation, achievement, production, risk- wash away, leaving high unemployment. We don' want to go down that path.

Health care is much more than having insurance and access to medical care. It is a moral issue. It is an issue about the role of the federal government and which trajectory America is going to take. Will we stick with the American ideal of equalizing opportunity, of protecting our individual rights, or are we going to replace that vision with a European one, where the goal of government is to equalize the results of people' lives instead of equalizing access to opportunity?

This problem can be fixed, not by pushing the market out, but by bringing the market in. One of the reasons health care is not doing well right now, one of the reasons health inflation is so high, one of the reasons there are so many distortions in health care, one of the reasons millions of Americans don' have access to affordable insurance, is because we' displaced the fundamental tenets of a free market. What are those tenets? Transparency on price, transparency on quality, and an incentive to act on both. Currently, you don' know what services cost, or who' good at providing them and who' bad. Even if you know such things, you' told by your insurance company, HMO, or the government where and who you have to go to to get your care. We don' want to pick a model where the government will ultimately be the single payer. Under that model, you can contain costs, but it requires rationing care. The Institute of Comparative Effectiveness, created in the stimulus package, is the bureaucracy through which that rationing will take place, telling providers, doctors, and physicians that enlightened bureaucrats will decide how best to achieve efficiency and how best to deliver care in America. The only way to quantifiably lower costs is to limit people' access to health care. That' not America. That' not who we are. It offends our sense of individual rights, of freedom and liberty and choice.

Can we fix the problems in health care without going down this path? Yes. That' exactly what we are attempting to do with the Patients' Choice Act. The Act recognizes the tax distortion that exists, a distortion that helped give rise to our third-party payment system. It' what helped give rise to the system that took the individual out of the game and took the consumer out of the game. We want to equalize tax treatment so we get the individual back in the game. We want the individual to be at least as powerful as the other players in health care. We' not saying, like some Democrats are, that we should tax health benefits and send the money to the government to build a new system and have new mandates and a new public-plan option. We' saying: "' equalize tax treatment. Let' take the tax benefit and delink it from the job and reattach it to the worker, so that everybody, regardless of how they get their health insurance, receives the benefit." What makes our bill different from every other on this issue is that the tax benefit goes back to the taxpayer. We do not use the exclusion money to pay for nontaxpayers, such as refundable tax credits. Under our plan, the money workers get by having deductibility on their employersponsored health insurance goes to them in the form of a tax credit: $5,700 for families and $2,700 for individuals. You keep your job, you change your job, you lose your job, you go work for yourself- tax benefit stays with you. It' portable.

Next, we need to reform entitlements. Let' not continue segregating poor people from the rest of society when it comes to health care. Let' not have Medicaid patients come into the clinic with " person" stamped on their forehead and then push them to the back of the line. Where I come from, most doctors won' take Medicaid patients. It underpays them and they don' want it. We' like to integrate those patients with everybody else by turning Medicaid into a voucher. We' place $5,000 on a card in addition to the tax credit so a Medicaid family under the poverty line would benefit by about $11,000 dollars. For people up to double the poverty line, that cash benefit phases from $5,000 down to $2,500 dollars.

These Medicaid reforms would save about a trillion dollars. The money that goes to taxpayers comes from the money that taxpayers were getting under the exclusion. The bill is revenue neutral and tax neutral. That' very important. We can fix these problems. We can have universal access to affordable health insurance in America, even for people with preexisting conditions, without having the government take it over, without new taxes, and without new spending.

For insurance, we would set up statebased exchanges. They' be entirely voluntary- the individual to participate, for the insurance companies, and for the states. We' create incentives for states to participate. This way, people can go into the individualmarket and see an apples-to-apples comparison of what kind of health insurance plans are available. We would also have a mechanism so that the uninsurable- who had breast cancer eight years ago or had prostate cancer- can also get affordable health insurance. Risk adjustment is the tool we use to do this. Each of these exchanges must have at least a minimum benefit health care plan, without the bells and whistles. The exchanges achieve the same goal as interstate shopping but do it in a way we believe is easier to pass through Congress.

 Health care transparency is also crucial. This is a huge difference between what the White House is proposing and what we' proposing. The notion of having the comparative-effectiveness decisions housed within the Department of Healthand Human Services is a regulatory model where enlightened bureaucrats will decide how health care is to be delivered, how transparency will occur, and how best practices will happen. The government- the greatest payer now and probably the single payer later- make the decisions. Enlightened dictates from bureaucrats are still dictates from bureaucrats. Instead, we' like to have a market self-regulatory system. We want transparency, so that when we' measuring things- a hip or a knee, doing cataract surgery, or a bypass- the specialists themselves will design the metrics by which we measure effectiveness. The stakeholders in such a structure will come up with standard metrics on price, quality, and best practices. And if you say you' using these metrics and you cook the books, then you will be committing fraud and the government will come and get you. We want to have health innovation, we want to make sure that heart surgeries that are invasive now become less invasive later, and we want breakthrough technologies to be rewarded, not controlled within a government system. That's why we don' want bureaucrats i charge. We want the American College of Cardiology saying, "' how we should do it this year and here' how we should do it next year." We want the market standardizing metrics.

Our plan starts with and revolves around the individual. We take all the money we spend right now- is two-and-a-half times per person what any other country pays on health care- don't pass it through bureaucracies or through third parties, but through individuals. Give individuals power. Give them power to get affordable health insurance, give them power in the form of money to buy that health insurance, and give them power in the form of information to make good choices. By empowering the individual, we can fix the problem of cost and everybody can have affordable health insurance, even though they might even have a preexisting condition. And we can do it without new taxes and without new bureaucracies. The nucleus of the system, at the end of the day, is the patient-doctor relationship, not a government bureaucracy.