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GOP Ducks Role as ‘Party of Yes’ on Health Reform

Late in the game, Republicans are proposing alternatives to Democratic health care reform, but they’re certainly not being bold.

If they were, they’d follow the lead of Rep. Paul Ryan (R-Wis.), the party’s foremost Jack Kemp-style conservative, whose Patients’ Choice Act aims for near-universal coverage without mandates.

Instead, to go along with incessant excoriating of “Obamacare,” House and Senate Republican leaders are proposing modest “step by step” cost-saving reforms that Democrats ought to consider, but won’t.

Republicans will offer a single substitute bill in the House and multiple amendments in the Senate to show they aren’t, as Democrats charge, the “party of no.”

But it’s largely a charade. Senate Republicans clearly hope to delay health care reform into next year, build public opposition and frighten moderate Democrats away from the bill being drafted by Majority Leader Harry Reid (D-Nev.).

The unspoken intent is to sink President Barack Obama’s signature initiative and send his poll ratings plunging, sparking big GOP victories in 2010.

All this does not exactly make the GOP the “party of yes” on health care. Ryan’s proposal would. It’s designed to use state-regulated free-market competition and patient choice to lower health costs and cover nearly all Americans.

What scares his GOP colleagues is his big swap: Workers would pay taxes on their employer-provided insurance benefits, and everyone would get a tax credit to buy their own insurance in the private market.

In 2008, Obama clobbered Sen. John McCain (R-Ariz.) by charging that a similar idea was a “tax increase on the middle class.” McCain failed to defend it.

As Ryan told me, though, “We’re not raising people’s taxes. We are taking one tax benefit and swapping it out for a different tax benefit.

“People at the bottom of the income scale do better under our plan than under the status quo and that’s as it should be. The average American will get a $1,200 tax cut, and the most anyone’s taxes will increase is $300 for people in the top rate, who can afford it.”

As Ryan points out, there’s wide agreement across ideologies about the merit of eliminating the tax exclusion for employer-provided benefits and providing a tax credit.

Just Wednesday, Obama’s budget director, Peter Orszag, was quoted in the Washington Post saying that changing that tax treatment “is among the most important single things that could be done to constrain costs and improve quality.”

Orszag has said it numerous times, but it’s not part of either Democratic or Republican proposals. Unions oppose it, and Republicans view it as too disruptive of a status quo in which people say they like the health coverage they’ve got.

With more money in their pockets, Ryan says, people would be free to buy their own insurance, either the policy offered by their employer or some other — and keep it if they changed jobs or lost their jobs.

Ryan proposes that each state develop an insurance exchange to organize the private market, but he would mandate that they offer the basic benefit now available to federal employees and Members of Congress.

Policies sold on state exchanges couldn’t discriminate on the basis of pre-existing conditions, and states would prevent “cherry-picking” of healthy patients by having insurance companies “risk-adjust” — share the risk for covering sicker patients.

Unlike most Republicans, Ryan shares Obama’s view that “the health care system in America is broken” with “costs rising at an unacceptable rate,” both doctors and patients “trapped” by current insurance practices and 47 million people uninsured.

However, he’s dead against the Democrats’ public option proposal. “The federal government would run a health care system ... with the compassion of the IRS, the efficiency of the post office and the competence of Katrina,” he says.

Ryan thinks that, even without an individual mandate, nearly everyone would sign up for some insurance plan — possibly a high-deductible plan — because states would make it convenient and cheap to do so.

House and Senate Republicans are offering some useful ideas. In the Senate, they will propose giving the uninsured and self-employed the same tax break that employer-insured workers get. House leaders think that’s too expensive.

In both chambers, they’d reform Medicaid, crack down on Medicare fraud, cap malpractice awards, allow small businesses to form insurance pools and permit interstate purchase of insurance.

Democratic majorities will vote it all down, of course. And maybe Republicans can use public doubts to kill Obamacare. But then, as Ryan says, the U.S. health care system will continue to be broken.

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