Shedding the Democrat-imposed and Republican-aided stereotype that they are the “Party of No” — no ideas, no cooperation, and no legislative alternatives — four Republicans today submitted a legislative alternative to the Democratic party’s federal government-centric health care “reform” proposals.

This morning, Senators Dr. Tom Coburn (R-OK) and and Richard Burr (R-NC) and Representatives Paul Ryan (R-WI) and Devin Nunes (R-CA) announced their “Patients’ Choice Act of 2009,” an attempt to “achieve universal access to quality, affordable health care without bankrupting our children with trillions more in debt or imposing draconian tax hikes on all Americans,” according to a release from the four Republicans, who added:

“The Patients’ Choice Act of 2009,” transforms health care in America by strengthening the relationship between the patient and the doctor; using choice and competition rather than rationing and restrictions to contain costs; and ensuring universal, affordable health care for all Americans.

“The Patients’ Choice Act” promotes innovative, State-based solutions, along with fundamental reforms in the tax code, to give every American, regardless of employment status, age, or health condition, the ability and the resources to purchase health insurance. The comprehensive legislation includes concrete prevention and transparency initiatives, long overdue reforms to Medicare and Medicaid, investments in wellness programs and health IT, and more.

Let’s take a closer look at the bill below the fold.

The Patients’ Choice Act of 2009, or PCA, lays out the same goals as Senator Max Baucus (D-MT), President Barack Obama (D-IL), and the rest of the Democratic leadership; however, as health care policy experts Grace-Marie Turner (Galen Institute) and Joseph Antos (American Enterprise Institute) wrote in today’s Wall Street Journal, the two parties’ “policy prescriptions are remarkably different.”

While Democrats are trying to find a way to force the population as a whole into Medicare/Medicaid-type bureaucrat-administered health plans, the Republican coalition behind the PCA is seeking to, as Turner and Antos put it, “provide a path to universal coverage by redirecting current subsidies for health insurance to individuals [and] provid[ing] a new safety net that guarantees access to insurance for those with pre-existing conditions.”

The Dreaded “Tax on Health Care Benefits”

Key features of the PCA include support for state-based health insurance exchanges, which I will get to in a moment, and the implementation of $5,700 annual tax credits to cover the share of “employer-sponsored” health plans — generally about 1/3 of an average $15,000 annual cost — that employees are currently footing the bill for out of pocket. The latter, which is the dreaded “income tax on health benefits” then-candidate Obama used to bludgeon his opponent, Sen. John McCain (R-AZ), to great effect during last year’s presidential campaign (due in large part to the latter’s inability to articulately and effectively defend his common-sense position), is not only a proposal employees will benefit from, but is a proposal now-President Obama and the Democrats’ Senate health care team have decided is not only workable, but desirable in the effort to “reform” health care policy.

As a PCA fact sheet released today explained:

Before taking over the Office of Management and Budget in the Obama Administration, Peter Orszag testified before the Senate Finance Committee, “[I]magine what the world would be like if workers [understood] that today it was costing them $10,000 a year in take?home?pay for their employer sponsored insurance and that could be $7,000 and they could have $3,000 more in their pockets today if we could relieve these inefficiencies out of the health system.”32 The Patient’s Choice Act would effectively increase workers’ wages. Higher take?home pay combined with the new tax subsidies would enable individuals to obtain more affordable and efficient health coverage.

Improved Health Care for Poor Americans

Unlike the federal and state method of dealing with low-income Americans by forcing them into Medicaid and SCHIP programs that underdeliver on health care services to such a degree that nearly half of prior-enrolled individuals and families simply decline to sign up for more than one year of the government-run programs, the PCA would provide those within a certain proximity to the federal poverty line with $5,000 debit cards that can be used to purchase effective, desirable private insurance or to pay for health care out-of-pocket. Not only can this provide poor Americans with resources necessary to aquire effective health care (unlike that provided by the government-run programs most of the poor are consigned to), but, with up to a quarter of unspent dollars on that debit card each year being rolled over and added to the next year’s available balance, there is (at least theoretically) a great incentive for those benefit recipients to exercise both wisdom and restraint in their use of that provided money.

However, there is the question of enforcement when it comes to cash giveaways like this — a lesson that should have been learned in the aftermath of Hurricane Katrina, when government-issued debit cards were used by refugees to purchase “luxury and entertainment items” all over the southeastern United States.

According to the PCA’s sponsors, the bill would also help poor individuals and families by “integrating low-income families with dependent children into higher quality private plans through direct assistance, realigning responsibility between federal and state governments in order to better coordinate benefits, rebalancing long-term care services to ensure choice between institutionalized and home-based care, and reserving Medicaid Acute Care for Individuals with Disabilities.”

“The Patients’ Choice Act,” according to the GOP, “would maintain current law for benefit security and stable funding for individuals with disabilities under the Medicaid program. The Act would enhance care for the disabled by allowing for better care management.”

State-Based Insurance Exchanges

The State Insurance Exchange portion of the PCA is where things get a bit trickier. Turner and Antos were correct when they wrote the following:

States could provide one-stop insurance shopping through new Health Care Exchanges rather than giving the federal government control, as most Democratic plans would do. And it frees up Medicaid money and provides added resources to the states to target additional help to those with disabilities and low incomes. It also calls for auto-enrollment to expand insurance coverage: People will have many options and opportunities to select insurance, but if they don’t make an active choice they can be automatically enrolled in private policies financed by the tax credit.

Ryan, Coburn, Burr, and Nunes simplified that explanation, saying:

What we need—and what this Act provides—is a consistent and fair market, so that everyone can afford coverage. Patients could choose which health care provider they trust. The freedom to choose creates better competition, fosters higher quality care, and lowers costs to levels that are fair for every American in every state.

However, the bill’s methods for doing this raise some questions, including why it is that state governments are seen as the laboratories of health care “reform” rather than the free market and why, given its obviously positive impact on the national health care market as a whole, a national private health insurance exchange (in other words, a federally-supported right of consumers to purchase health insurance policies across state lines, free of the onerous mandates that drive health costs up in some states to a far greater degree than in others) such as that proposed in Rep. John Shadegg’s perenially-submitted Health Care Choice Act.

Further, the authors’ hailing of Massachusetts as and example of a state-level health reform “success” should sound alarm bells in the mind of anybody who has been paying attention to the current health care debate, as well as to the utter disaster the Bay State’s attempt at universal-coverage-via-mandate, engineered by former Governor Mitt Romney (R-MA), has been.

As I wrote recently on Massachusetts’ “RomneyCare” disaster:

In 2006, Governor Mitt Romney (R), working with a Democratic state legislature, passed and signed the Massachusetts Health Care Reform Act, a groundbreaking piece of legislation aimed at ensuring that every citizen of the Bay State possessed health insurance, while simultaneously lowering the cost of health coverage and improving access to quality care.

Unfortunately, the program in practice has been a colossal failure, expanding state bureaucracy and government control over the health care market and provider-patient dealings, while simultaneously driving up health insurance premia, increasing health care costs, and creating a chronic shortage of providers – all at an annual price tag of over twice the originally-estimated $600 million.In 2006, Governor Mitt Romney (R), working with a Democratic state legislature, passed and signed the Massachusetts Health Care Reform Act, a groundbreaking piece of legislation aimed at ensuring that every citizen of the Bay State possessed health insurance, while simultaneously lowering the cost of health coverage and improving access to quality care.

Unfortunately, the program in practice has been a colossal failure, expanding state bureaucracy and government control over the health care market and provider-patient dealings, while simultaneously driving up health insurance premia, increasing health care costs, and creating a chronic shortage of providers – all at an annual price tag of over twice the originally-estimated $600 million.

…

Rather than try to foster competition between insurers and providers, to break away from the third-party-payer model that necessarily drives up costs due to a lack of communication and pricing transparency, or to promote effective health coverage solutions like consumer-driven health care and retail clinics, the architects of Massachusetts’s program put their faith in bureaucracy, regulation, and government control.

The result could not be more clear: with billions having been spent on a program that has failed to improve access to care, that has failed to prevent insurance costs from rising at twice the national average, and that has failed to extend coverage to more than two-thirds of those who previously lacked it, the Bay State’s grand foray into “universal health care” via individual mandate has been a colossal failure, and should serve as an example of what not to do, rather than what to do, for all who seek real health care reform.

This is the program about which Ryan, Coburn, et al say:

Many states have led the nation in finding comprehensive health care solutions for their citizens, including the well-known, bi-partisan achievement of universal health care through a private system in Massachusetts. The federal government should not impede progress, but rather partner with states to make further progress.

Conclusion

The Patients’ Choice Act of 2009 is an effective alternative to the rationing-based, bureaucrat-run, federal-government-centric proposals being kicked around Washington, DC from the White House to Capitol Hill to K Street. The bill is not perfect, a fact exemplified by its citation of the disastrous MittCare “reform” program in Massachusetts and by its reliance on government to step in and fix the combined problem of decreased access to care and rising health care costs despite the fact government at the federal and state levels played a key role in causing these issues by prohibiting interstate competition, imposing mandates, and pushing our health care marketplace further toward a third-party-payer only system.

Despite these drawbacks, though, the PCA is light years ahead of the government-run alternatives being championed by President Obama and his Democrats in the U.S. Senate. The willingness to attack the currently problematic tax treatment of health care and to help poor Americans divorce their medical fates from the whims of state and federal bureaucrats are giant leaps in the right direction, and deserve more attention and support.

Unfortunately, the fact that the PCA takes less than a fully government-centric approach to solving the health care crisis virtually guarantees it will not make it out of committee in the current Congress. However, by putting forth this proposal, Republicans in the House and Senate are effectively showing that they are, in fact, paying attention to policy and paying more than lip service to offering alternatives to the Obama-led Democrats’ statist proposals. That in and of itself should be considered a victory for the GOP, even though this legislation won’t see the light of day any time soon in either federal legislative body.