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The Republican Health Care Reform Plan: HR 3218

Improving Health Care for All Americans Act

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The Republican Health Care Reform Plan: HR 3218

Republican House Rep. John Shadegg of Arizona, after a news conference introducing House Bill 3218, the Improving Health Care for All Americans Act.

Scott J. Ferrell/Getty Images
Although liberals say there is no such thing as conservative or Republican health care reform, or that conservative Republicans have nothing to offer the discussion except criticism, there are actually a number of conservative ideas in circulation, and in fact, an alternative to the Democrats' health care proposal -- HR 3218 -- was introduced on July 14 by Republican House Rep John Shadegg of Arizona.

The Improving Health Care for All Americans Act is only 24 pages long and doesn't cost a single additional penny (compared to the Democrats' plan, which is more than 1,100 pages and costs upwards of $1.4 trillion at last count). Despite the brevity of the bill, it actually does more for health care recipients and non-recipients than President Barack Obama's plan.

What It Does
The easy-to-understand legislation aims to accomplish three things, although if enough Democrats sign on to it, these may be augmented by additional reforms. For now, HR 3218 provides for refundable tax credits for medical costs, expands access to health insurance coverage through individual membership associations and assists in the establishment of high risk pools.

While the bill falls short of establishing meaningful tort reform or creating a free-market health care system, these wouldn't be a realistic starting place for Republicans anyway. After all, Democrats are resistant to cleaning up judicial activism and establishing competition in the health care industry is a radical reform. These are long-term reform goals that wouldn't stand a chance in the Democrat-controlled Congress.

Refundable Tax Credits
Benefits recipients with health care insurance would see a tax credit equal to the amount paid by the taxpayer for health insurance premiums and out-of-pocket medical care costs for the entire year with a cap of $2,500 for individual tax filers or $5,000 for joint filers. Interestingly, the legislation doesn't just include American citizens. It includes any person who is in the US legally.

The tax credits are not extended to those who receive medical care reimbursements through Medicare, Social Security or other government programs. The legislation does, however, account for cost-of-living increases, and best of all, allows tax credits to be paid in advance directly to providers.

Expanding Access to Health Insurance
One of the more interesting aspects of HR 3218 is that it essentially relieves pressure from employers to provide health insurance for all its employees. While it doesn't create a free-market exactly, the bill comes close by allowing various legal entities such as churches, schools and other types of associations to offer health insurance coverage to its members. This would allow social service organizations unafiliated with the federal government to provide health insurance coverage to its mentally ill or otherwise less fortunate members. Because the basis for coverage is now expanded to a number of entities, not just employers, health insurance companies have an incentive to offer discounts on premiums in exchange for an increase in the number of insurance plans being issued.

High Risk Pools
Finally, the Republican bill ensures that the federal government will match 50 cents for every dollar individual states pay to create and fund high-risk pools. More than 30 states operate high risk pools, which make it possible for people whose pre-existing conditions make it virtually impossible for them to buy conventional health insurance policies (the National Association of State Comprehensive Health Insurance Plans can tell you if your state has a high risk pool).

High risk pools offer the same coverage found in conventional policies, with one big exception -- these pools offer comprehensive major medical policies for a variety of chronic illnesses and provide a set of benefits specific to those particular illnesses. Like conventional policies, they can be purchased in the form of HMOs, PPOs or indemnity plans.
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