Jim DeMint's amazingly crazy health care plan

A brilliant stroke of GOP genius: Let's give TARP money to the HMOs!

Published June 23, 2009 5:16PM (EDT)

There is a strange beauty to the new health care plan proposed Tuesday by Senator Jim DeMint, R.-S.C. The inspiringly-titled "Health Care Freedom Plan," which promises to "Insure More Americans in Half the Time at No Cost," takes us, in just one summary page, to a Republican fantasy-land so devoid from any moorings in reality that one is forced, willy-nilly, to admire it, irrespective of its merits. It takes true chutzpah to pull something like this off.

The plan, basically, is for the federal government to give out annual vouchers to Americans which they can spend on any health care insurance offering they want: $2000 dollars for individuals, and up to $5000 for families.

Under the Health Care Freedom Plan, Americans would be able to keep the care they have now, but if they are uninsured or unhappy with their current plan, they could access a voucher to purchase health insurance anywhere in the country.

Between 2005-2010, according to OpenSecrets.org, Senator DeMint received $226,000 from health professionals and another $209,000 from insurance companies. If something like DeMint's plan ever became reality, those campaign contributions could be considered one of the greatest investments of all time. Because what DeMint is proposing here is a transfer of truly vast sums of money from the federal government straight to the HMO industry. Who needs to nationalize health care? Let's just give them all our money.

And at no cost to the taxpayer! Or, as the press release puts it, "without adding a single dime to the deficit."

How, you might wonder, could the U.S. government offer a $5000 health care voucher to every uninsured American family without adding a dime to the deficit? The answer is brilliant: Pay for the program with TARP money! Yes, "The Health Care Freedom Plan" is paid for by requiring banks to pay back all their TARP money within five years, and then use that money for the vouchers.

Frankly, I am in awe. Nothing will be added to the deficit because we will be re-using money that was added to the deficit last September.

So what happens when TARP runs out? How would succeeding allocations of vouchers be funded? There's not a whisper of an answer to that question in the DeMint press release or summary.

Two other questions.

First: If the government is offering vouchers to anyone unhappy with their current coverage, why should businesses bother offering health care coverage to their employees at all? There's a built-in incentive here for employers to abandon their own health care offerings, which would surely send the cost of the government program skyrocketing in short order. (Yes, this would be a potential problem with any government-subsidized health care reform, but the incentive seems particularly stark in this case.)

Second: How exactly would this plan work to bring down health care costs? At first glance it would seem to do exactly the opposite. A massive transfer of taxpayer dollars almost directly to the HMOs would seem inherently inflationary. What incentive does anyone have to cut costs when the government directly subsidizes the HMOs?

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Healthcare Reform How The World Works Jim Demint