Conservative Health Reform

Why It Could Deepen Our Health System Crisis

Washington, D.C. – The Hyde Park Project and the Wonk Room, the progressive policy war room of the Center for American Progress Action Fund, released a detailed critique of conservative proposals to fix our ailing healthcare system. The report, “Conservative Health Reform”, by Jeanne Lambrew, lays out the dangers of the type of plan most conservatives are putting forward, “consumer-directed health care.” This market-oriented model gives individuals increased responsibility for their own health care spending by encouraging high-deductible health insurance purchased in the market offering individual policies. The report details a number of problems with the conservative proposal:

High deductibles could lower access by:

Discouraging the use of needed care
Depressing the quality of care

A shift from group insurance to individual insurance market could diminish coverage by:

Undermining what limited protections exist in the individual market
Putting millions of already-insured people at risk of losing coverage
Worsening the uninsured problem

Conservatives, trusting the marketplace to solve the cost crisis, would disband group purchasing and deregulate insurance. This would:

Do little to affect excessive use and prices
Raise administrative costs
Diminish the effectiveness of cost savings initiatives

The report concludes that the conservative health system proposals are both radical and dangerous, including those offered by Senator John McCain (R-AZ) and Senator Tom Coburn (R-OK). Eliminating the current tax subsidy for health insurance and replacing it with a new one would dramatically change the way that nearly 160 million Americans get coverage. Workers could lose employer-based coverage without gaining an affordable, accessible alternative source of coverage. The impact would be even larger if public programs are scaled back and all Americans are expected to join high-deductible health plans. High-deductible plans in a de-regulated individual insurance market would shift costs to the poor and sick. And, its flawed theory and design together could actually raise health system costs, exacerbating the health system crisis.

Read the full report (pdf)

The Wonk Room, the first public policy rapid-response blog of its kind, is a project of the Center for American Progress Action Fund. To find out more, visit http://thinkprogress.org/wonkroom/about.

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