Burr Pushes Alternative To Obamacare | Eastern North Carolina Now

    Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.

CARE act would expand patient options, encourage innovation

    RALEIGH     Even though he lacks the blessing of the GOP leadership in Congress, U.S. Sen. Richard Burr, R-N.C., is pushing a national health care reform he says would do precisely what the GOP establishment has pushed — repealing and replacing government-driven Obamacare with a system allowing more patient choice and fewer mandates.

    Burr, and U.S. Sens. Tom Coburn, R-Okla., and Orrin Hatch, R-Utah, say their Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act would reduce health care costs while improving the quality of care. They will continue working to refine and strengthen the proposal while seeking consensus to introduce legislation.

    "We repeal Obamacare, and we replace it with a patient-centric health care plan that empowers states and individuals, one that creates a robust market of competition," Burr said during a March 31 luncheon in Raleigh sponsored by the John Locke Foundation.

    "In a short sense, we allow the American people — based upon their age, their income, and their health condition — to buy a plan that meets their needs," and uses tax credits instead of subsidies to provide coverage for individuals and small employers, Burr said.

    "We do exactly opposite of what the White House does. We don't tell you this is the only plan you can have," Burr said. "We actually incentivize the industry to create plans that meet every possibility that might exist in the marketplace, and we move 100 percent of the jurisdiction on health care away from the federal government and we put it back where it should be, at the states," Burr said.

    Burr, in his second Senate term, has no expectation that his or any other legislative proposal could become law until Obama leaves office in 2017. Yet he believes that Obamacare will be so unpopular when the next presidential race rolls around that even the Democratic nominee will have to promise to get rid of the president's signature health care law.

    Burr and his CARE Act colleagues say their proposal, unlike Obamacare, would reduce rising health insurance premiums, offer Medicaid beneficiaries an option to purchase private coverage, grant tax credits to patients rather than insurers, and protect individuals' rights of conscience. Nor does it affect Medicare, from which Obamacare is estimated to divert hundreds of billions dollars.

    In another divergence from Obamacare, the CARE Act imposes no new taxes on medical devices or prescription drugs, does not create a government website portal for enrollment, does not implement federally run health exchanges in the states, has no federally mandated health benefits, does not create a board of unelected officials to regulate payments, does not expand Medicaid, or provide special treatment to union health plans.

    Like the Patient Protection and Affordable Care Act, the CARE Act covers people with pre-existing conditions, provides coverage for dependents up to age 26, and eliminates lifetime limits on benefits.

    Burr said President Obama has issued a "constant, public proclamation that if you've got a great idea, let me see it. If you've got a way to make health care better then bring it to me."

    Yet he and Coburn "are now in year four of offering the president plans, tweaks, proposals," and making no progress. "I've met individually with the president. Tom and I have had dinner with the president. We've spoken to every person in the administration. Nobody's willing to accept any changes."

    Due to Obamacare, "We anticipate the [insurance premium] increases for 2015 to exceed 40 percent. If you live in California your increase will probably be over 100 percent," Burr said.

    Those on subsidized Obamacare plans will begin to notice the Affordable Care Act is not so affordable when they begin paying high out-of-pocket expenses, Burr said.

    "If we had to pay for their premium, who's going to pay for their deductibles?" Burr said.

    Obamacare has 12 taxes and numerous other costs associated with its reforms. By some accounts, it is expected to cost as much as $2 trillion in its first 10 years.

    In contrast, Burr said the CARE Act would save $1.1 trillion, and add just one tax — on what the president calls "Cadillac plans" that feature high premiums paid by employers and are fully excluded from the tax structure.

    Those would include union-negotiated plans with rich coverage benefits, and company platinum plans for CEOs and executive managers. The tax would be assessed as ordinary income, dollar-for-dollar, for every benefit offered that exceeds 65 percent of the plan's cost. The threshold for making additional medical benefits taxable income would be in the neighborhood of $17,000 to $19,000 per plan.

    Burr conceded there was pushback to making the CARE Act plan public prior to the Nov. 4 midterm elections.

    "The Republican leadership has talked about trying to find consensus around one direction," he said. "It's important that we have an understanding that we're not going to get consensus in the next six months in Washington. We're not going to find one plan that all Republicans get behind," and it's vital to begin advancing alternatives to Obamacare now.

    Michael Cannon, director of health policy studies at the free-market Cato Institute, is among those who believe it is unwise to coalesce around a single plan, or to offer a detailed bill prior to the November election, "because opponents of repeal will try to shift the focus of debate to your replacement plan," and nitpick it.

    "I don't want to distract attention from Obamacare by criticizing Burr's proposal even though I do have some criticisms with it," Cannon said. "I would just hope the senator spends more time on Obamacare than on his own replacement plan because his replacement plan won't mean anything until Obamacare is repealed."

    Instead, Republicans should "talk about principles, and how markets make health care better, and more affordable, and more abundant, especially for people with low incomes, the most vulnerable people in society. And then you turn the conversation right back to how Obamacare is the exact opposite of all those things," Cannon said.

    Burr said his plan does that by using tax credits to expand private insurance coverage choices instead of limiting the credits to government-approved plans. The credits would extend to Medicaid.

    Currently, only 40 percent of doctors accept Medicaid patients, he said. With a tax credit, Medicaid-eligible individuals could purchase private insurance and have broader physician options.

    "We've even designed it in a way where [any state could add a subsidy of] $1,000, or $2,000, or $3,000 in their transition out of Medicaid into private insurance" without the difficulty of getting a federal waiver, Burr said.

    Making "massive changes" in tort reform could generate cost savings, he said, but "we don't prescribe what" aspects of tort law should be reformed at the federal level. As an example, he said states might want to create "liability courts, where a judge hears nothing but liability cases, and no witnesses are allowed to come in."

    The CARE Act also shifts the actuarial ratio for seniors back to its 5-1 level, meaning insurers could not charge seniors more than five times the cost of a healthy 23-year-old's plan. Obamacare lowers that ratio to 3-1 for seniors. Lowering the ratio has shifted higher costs to younger patitents, because older people generally are less healthy and incur greater costs yet aren't charged correspondingly.