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Price: Use Tax Cuts to Reform Healthcare

Friday, 28 Aug 2009 11:47 AM

By John Rossomando

The Democratic healthcare reform proposal has created a firestorm of controversy because of its $1 trillion price tag during the next decade, its failure to exclude abortion coverage, and tales of so-called “death panels,” among other things.

However, the media has paid scant attention to alternatives such as Republican Rep. Tom Price's plan, which he calls the “Empowering Patients First Act.”

The bill, one of several Republicans have offered, is a long shot at best to be enacted, but it shows that healthcare reform can be accomplished without excess cost or complexity, said Price, a Georgia legislator/physician who heads the House Republican Study Committee.

See Video: Rep. Tom Price discusses healthcare, and the ‘Kennedy effect’ - Click Here Now

“It is important to remember that the president’s plan that Speaker Pelosi’s plan would increase taxes by $800 billion and cuts Medicare by $500 billion, and we don’t raise taxes by one penny,” Price said. “And that’s the kind of reform we think is positive, and we think the American people can embrace.

“Instead of turning the entire upside down on its head and have government run everything, we believe we need to keep what’s right and fix what’s wrong.”

Price's proposal (HR 3400) differs from the bill (HR 3200) the Democratic leadership favors because it would not impose employer or individual healthcare mandates, but would rely on incentives to reduce the number of uninsured. It also answers objections that have been made by the Catholic bishops and other abortion opponents by specifically excluding abortion coverage from the program.

Price’s bill, which has more than 30 co-sponsors, focuses on helping those who don’t feel they can afford health insurance to buy it using a system of tax credits and deductions, and a pooling mechanism to help reduce the purchase cost.

Individual health insurance premiums would become tax deductible and would be capped at the national average value of employer contributions for health insurance, and they would count toward reducing adjusted gross income at tax time.

The proposal would include refundable health insurance tax credits of up to $2,000 annually for individuals, $4,000 for couples, as well as a $500 credit per dependent up to a maximum of two.

These numbers were chosen because they reflect the average annual cost of maintaining an individual health insurance plan, Price said.

It also would allow Americans to keep their health insurance if they change or lose their jobs.

“Many Americans are concerned about if they were to lose their job or change jobs that they would lose their health insurance," Price said. “We believe it is important that we solve that problem. We do so by making it so each individual is able to own and control his or her health insurance coverage regardless of who is paying for it.”

The bill would give employees the option of having their employer contribute to other health insurance coverage instead of the company’s group health insurance plan, which would allow them to own and keep their coverage in the event they either lose or change jobs.

Employers with 50 workers or less would be eligible for up to a $1,500 temporary two-year tax credit to help cover health-plan costs.

“The way to reform the system is to allow for a robust assortment of pooling mechanisms through high-risk pools at the state level, whether it is through the opportunity to gain access to a larger group — a pool group — regardless of who you are, so you get the purchasing power of millions as opposed to being out there in the individual market,” Price said.

States would be made eligible for a $300 million grant to fund high-risk pools that would cover those with preexisting conditions.

His legislation would block CHIP coverage to families making more than 300 percent of the federal poverty level, or $66,150 for a family of four. Children in families making between 200 percent and 300 percent of the federal poverty level could enroll only after 90 percent of eligible children from families making under 200 percent of the poverty line are enrolled. States would also be required to provide a means to cover children enrolled in CHIP or Medicaid under group health plans.

Other aspects of the plan would cap malpractice lawsuits at $250,000 and create a loan forgiveness program that would give medical students up to $50,000 if they spend at least five years as a general practitioner. It also would allow consumers to buy health insurance across state lines to increase competition in an effort to drive down costs, which mirrors Senate legislation that U.S. Sen. Jim DeMint, R-S.C., offers.

At least one Democrat who favors the majority plan indicated he likes the idea of having insurers compete across state lines in principle.

However, U.S. Rep. Joe Sestak, D-Pa., told Newsmax it would drive down health costs only if a single national regulation was in place governing coverages rather than having a patchwork of state minimum coverages.

He also took issue with Price’s bill, saying it doesn’t go far enough to explain how it would pay for itself.

See Video: Rep. Tom Price discusses healthcare, and the ‘Kennedy effect’ - Click Here Now

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