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27 IRET Congressional Advisory 1 (1994)

handle is hein.taxfoundation/iretcgadv0026 and id is 1 raw text is: IRET! February 28, 1994 No. 27 CLINTON 'LITE HEALTH CARE REFORM: A WOLF IN SHEEP'S CLOTHING Support for the Clintons' health care reform proposal has declined since it has been revealed as a big government takeover of health care. Attention and growing support has shifted to the bi-partisan Managed Competition Act of ..Cooper's 1993, H.R. 3222, introduced market appn by Rep. Jim Cooper (D-TN) as trivial sense t a more moderate alternative. less intrusive It is not. making than Cooper claims his bill is and the singl a market-based approach to health insura, health care reform. However, Cooper's bill represents a market approach only in the trivial sense that it is somewhat less intrusive of private decision making than the Clintons' plan and the single payer or national health insurance plan introduced by Senator Paul Wellstone (D-MN) and Rep. Jim McDermott (D-WA). In reality, Cooper correctly characterizes his plan as Clinton 'Lite'. The Cooper proposal would significantly increase the role of government in the provision and financing of health care services. In this regard, the Clintons' plan can be characterized as Cooper Heavy because first Cooper's, and later the Clintons' proposals, were derived from the same managed competition model. Vil ach hat i of p/ the4 e pay ice p1 There are several clues that suggest that the Cooper bill would move health care in America away from market based decision making and toward greater government control. First, it would involve large tax and spending increases. The proposal would limit the amount of health insurance premiums that companies could deduct from their taxable income. This limitation would both exert control over health insurance and raise revenues for additional federal spending. Cooper would also deny tax deductions to plans that use risk pools instead of community rating to establish premium rates. People with healthy habits would subsidize the premium costs of people who engage in unhealthy behavior, such as drug or alcohol abuse, promiscuous sex, or mountain climbing. Cooper's plan also includes a new mandatory tax on health insurance premiums (up to 1%) that would be paid to Health Plan Purchasing Cooperatives (HPPCs), his version of the Clintons' Regional Alliances. HPPCs, to represents a be established as regional, only in the geographic monopolies by the t is somewhat states, would collect and then ivate decision distribute all individual and ?lintons' plan small business employee health ?1 or national insurance premiums. an Cooper's plan would have the government dictate a new one-size-fits all system of health care delivery and health insurance coverage. Like the Clintons' plan, Cooper's would establish a new federal bureaucracy, a Health Care Standards Commission, that would define a standard health benefit package. His plan, moreover, would practically force Americans to receive their health care from federally-approved Accountable Health Plans (AHPs) which resemble HMOs (Health Maintenance Organizations). In order to be approved, AHPs would have to maintain and provide the government with extensive records about medical outcomes, treatment costs, and patient satisfaction. If a company or individual participates in an AHP, the premiums are considered a Institute for Research on the Economics of Taxation IRET is a non-profit, tax exempt 501(c)(3) economic policy research and educational organization devoted to informing the public about policies that will promote economic growth and efficient operation of the free market economy. 1730 K Street, N., Suite 910, Washington, D.C. 20006 Voice 202-463-1400 * Fax 202-463-6199 0 Internet www. ret.org

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