Health Reform: How The Gop Could Blow Its Chance

As the White House works away at its health-care reform plan, Democrats are getting nervous and Republicans are rubbing their hands in anticipation. The GOP thinks that Bill Clinton's complex, regulation-heavy proposal will scare voters silly. By offering their own version, Republicans hope to shuck a reputation as gridlocking obstructionists they won during the budget fight. "There will be a positive Republican alternative," vows GOP Chairman Haley Barbour. "If the [Clinton] plan is as bad as we've heard, our alternative won't be swept under the rug."

But the GOP may be blowing its chance. Beset by deep ideological divisions, Hill Republicans are pursuing four approaches to health-care reform--and their disdain for each others' plans almost matches their shared dislike of Clinton's. The result: The party can't capitalize on the long delays that have bedeviled the Clinton plan, now expected in September. And even when the President unveils his program, odds are the GOP response will be murky.

FEW MANDATES. The Republican alternatives to Clinton range from "less of the same" to "as little as possible." In the Senate, a three-year-old study group headed by Finance Committee member John H. Chafee (R-R.I.) has nearly wrapped up work on a "managed competition" scheme. Like Clinton, Chafee would set up health-insurance-purchasing cooperatives that would give consumers a choice of plans. But the Chafee plan wouldn't force employers to pay for coverage, require companies to join the cooperatives, or resort to price controls. Chafee, who has been trying to build a moderate health-care coalition for years, figures that conservative Democrats will rally around his bill. "Health reform will be a bipartisan affair, or it won't happen," he says.

Chafee's first problem may be corralling Republicans. Even task-force moderates are holding his plan at arm's length. "Chafee speaks for the group only to the extent that he organizes the meetings," says an aide to a Chafee ally.

Chafee also faces intraparty competition from Senator Phil Gramm (R-Tex.), a Presidential aspirant. Under Gramm's plan, families would be expected to cover the first $3,000 in annual medical expenses with help from tax-deductible "medical IRAs." Mandatory insurance would pay for catastrophic illness. Price-conscious shoppers would drive down costs, Gramm argues, without the "collectivism" of the Clinton and Chafee plans. "If you change the incentives," he says, "consumers will decide how to reorganize the health system--not some planners over at the White House."

"PRETTY SKIMPY." In the House, Republicans aren't sure that anyone should reorganize health care. Minority Leader Robert H. Michel of Illinois and Whip Newt Gingrich of Georgia have introduced a plan based on President Bush's modest 1992 reform effort. Leadership aides argue that this mix of insurance reforms, extra spending on clinics, and tax breaks for the self-employed could easily pass Congress--but they admit it falls far short of comprehensive reform. "If you lay our plan alongside Clinton's, it's going to look pretty skimpy," says a GOP staffer. Meanwhile, Representative George W. Gekas (R-Pa.), is pushing a plan that relies mainly on health education and state-by-state reforms.

Polls suggest that GOP minimalism may best reflect what the public wants. If Congress has a taste for major reform, Chafee's voluntary managed competition offers sweeping change with less disruption than Clinton's mandates. And the House leadership's bill could be everyone's second choice if more ambitious efforts bog down. But disunity may wreck the GOP's effort to escape their image as the party that just screams "No!" First, they have to learn to say "Yes" in unison.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE