Facebook Twitter Tumblr Close Skip to main content
A Project of The Annenberg Public Policy Center

Republican Infighting on Health Insurance

Never shy about training its sights on fellow Republicans, the Club for Growth is going after Utah GOP Sen. Robert Bennett with a new television ad and letter-writing campaign targeting his support for a Senate health care bill.

It’s not a Senate bill that has cleared any committee, such as the one passed in July by the Health, Education, Labor and Pensions Committee; the HELP bill is the one that, at least for now, is generally referred to as "the Senate bill" in the health care debate. Rather, the bill mentioned in the ad is an older, different bill that, despite the ad’s urgency, has laid dormant in committee. The Healthy Americans Act was first introduced and referred to the Senate Finance Committee in 2007, during the 110th Congress. It was reintroduced in the current Congress and referred to committee in February of this year.

Contrary to the ad’s claim that it is a "health care proposal sponsored by Senator Robert Bennett and liberal Democrats," it is supported by a fairly bipartisan bunch of legislators. The bill is commonly referred to as Bennett-Wyden for the two lead sponsors (Democratic Sen. Ron Wyden of Oregon is the other), but there are an additional 12 cosponsors, a group which includes five Republicans and one Independent. "As for Bennett’s cosponsors being "liberal," one of the Republicans backing the bill is Idaho Sen. Mike Crapo, who received an 88 score out of 100 from the American Conservative Union in 2008, the ninth highest score in the chamber.

Additionally, the ad is wrong when it says of the bill’s cost: "The Congressional Budget Office estimates more than a trillion dollars." Actually, CBO said "our preliminary analysis indicates that the proposal would be roughly budget-neutral" when fully implemented in 2014, and "would be essentially self-financing." And CBO ultimately concluded that it might be a moneymaker for the federal treasury:

CBO: As a result, total Federal outlays for health insurance premiums in 2014 would be on the order of $1.3 trillion to $1.4 trillion. Those costs would be approximately offset by revenues and savings from several sources: premium payments collected from individuals through their tax returns; revenue raised by replacing the current tax exclusion for health insurance with an income tax deduction; new tax payments by employers to the Federal government; Federal savings on Medicaid and SCHIP; and state maintenance-of-effort payments of their savings from Medicaid and SCHIP. … For the years after 2014, we anticipate that the fiscal impact would improve gradually, so that the proposal would tend to become more than self-financing and thereby would reduce future budget deficits or increase future surpluses."

The reason is that the Wyden-Bennett proposal would change the mainly employer-provided insurance system. Many health care premiums now paid directly to insurance companies would instead flow through the federal budget. Instead of contributing toward employees’ health insurance, employers would increase workers’ pay, and workers earning less than $125,000 a year ($250,000 for couples) would get a federal tax deduction. Those who don’t have employer-sponsored insurance also get the deduction. The effect of this would be a tax increase on workers making more than $250,000 and a tax subsidy for low- and moderate-income workers who don’t currently have health insurance, according to an analysis by the Lewin Group.

Americans would choose from a list of approved private insurance plans, which could include previously employer-sponsored plans, and premiums would be withheld through the tax code. The proposal makes insurance plans portable, and it includes insurance market regulations similar to those in the leading congressional health care bills. To read more on the plan, as described by its sponsor, click here.

Lastly, it’s interesting to note that the Club for Growth has an unlikely ally in its opposition to the bill. In May, we wrote about an AFSCME radio ad that attacked Democrats for sponsoring the bill. So this truly bipartisan attempt to overhaul the health insurance system is now being attacked both from the left and the right with misleading ads.