‘Just Gotta Learn from the Wrong Things You Done’

Published September 1, 2001

I’ve long had an interest in health policy. But I first became passionate about health care during the epic battle over Clintoncare. I still regard that victory as one of my party’s finest hours. And I take a certain satisfaction in the role a certain chart played in that victory—the chart I created with my staff, depicting the plan’s dozens of new bureaucracies. We captioned it: “Simplicity Defined.”

People don’t realize how close we came to passing the Clinton plan in the summer of 1994. What could have been a catastrophe for America turned out to be a catastrophe for the Democrats. The fact they proposed it is the biggest reason we took control of Congress that year. Had it passed and become law, I doubt President Clinton would have been reelected two years later.

Winning the majority in ’94 gave us a chance to put our own stamp on health policy, and HIPAA was the first bill we passed. As you know, it started out as a modest little bill claiming to make coverage portable from job to job. It grew to become a whole package of reforms, most of them having nothing to do with portability.

It turns out HIPAA did little to make insurance more portable, but it did set a dangerous precedent for the federal regulation of health insurance. And it appears to have expanded bureaucrats’ access to our medical records without a search warrant. To be sure, we actually made it better than it might have been. And we did manage to get Medical Savings Accounts attached to it. But looking back now, it seems undeniable that the first health care law after Clintoncare was, to some extent, the first installment of Clintoncare.

Step by Step

The Left has learned its lesson. In the wake of defeat, they’ve worked step by step to obtain what they could not get all at once. HIPAA, it turns out, was their first step. Next came KidCare. And now the Senate has passed a so-called “Patient’s Bill of Rights” that would vastly expand federal regulation of health insurance and swell the ranks of the uninsured. The liberals are so sure of that bill’s passage that they’re already waiting in the wings with their next steps.

For instance, just the other day Senator Kennedy unveiled a bill to let parents into KidCare. And Pete Stark—listen to this—wants to put all kids on Medicare. It doesn’t take a crystal ball to see where this process is headed.

You know, it’s ironic that the Democratic Party poses as the great enemy of HMOs, since it was Senator Kennedy who wrote the first federal HMOs law in ’73. And it was Democrats who tried to herd all Americans into HMOs in ’94. This amazing turnaround is proof, as David Horowitz notes in his book, The Art of Political War, that “the resurgence of the Democratic Party” has occurred largely “through its appropriation of Republican rhetoric and policy.” And unfortunately, in health care, they’ve appropriated a lot more rhetoric than policy.

Time to Go on the Offensive

So I appeal to you, fellow conservatives: Let’s get on offense and work harder for free-market health reforms, because, as National Review advises, “if Republicans don’t reform health care themselves, the system will evolve in a socialist direction, while doing constant damage to the party of liberty along the way.”

Ladies and gentlemen, patients need more than a bill of rights. They need a declaration of independence. Yes, patients should be able to sue their HMO. But even more, they should be able to fire their HMO. This is America. Patients should have the right and the ability to take their business elsewhere.

That’s why MSAs are so important. As you know, MSAs combine peace of mind with freedom of choice—affordable insurance with tax-advantaged savings. The existing pilot project has shown MSAs to be very attractive to the uninsured . . . which is why Senator Kennedy has worked so hard to stop them.

As you recall, back in ’96, he forced us to accept a whole series of Luddite restrictions as the price of getting MSAs on the books. Well, I’m happy to report the House is now likely to repeal those restrictions in whichever version of patients rights we pass. Once MSAs are made permanent, workable, and universally available, I’m hopeful a real market will form, MSAs will take off, and national health insurance will become significantly harder to enact.

Long term, we must get serious about reforming the tax treatment of health care. It’s time to level the playing field so all Americans have access to insurance that’s portable, affordable, and tailored to their family’s needs.

As it happens, my flat-tax bill would do just that. And I believe we’ll get there—we economists always believe we’re going to reach the bliss-point!—but until that day comes, we can do the next best thing. We can pass refundable tax credits for the uninsured.

The Armey-Lipinski “Fair Care” plan would give a family of four a certificate worth $3,000 to purchase good private coverage. And thanks to online markets like eHealthlnsurance.com, such coverage is becoming more affordable all the time.

Evolution, not Revolution

Now, let me be clear. I do not think we should blow up the employer-based system. I think we should transform it from within. We should help job-based coverage evolve to give workers more choice and control. For example, we should end the use-it-or-lose-it rule on Flexible Spending Arrangements. If workers could accumulate “flex cash” for medical expenses, they would basically have a job-based MSA without the Kennedy restrictions.

At the same time, we should promote a big new idea in health care: defined contribution plans. Just as 401k pensions have given millions of workers more choice and control, so could “401k health plans.”

It would be a shame to let a patients’ rights bill become law without using the opportunity to help American workers exercise greater control of their health care. Remember, when you can hire and fire your insurer, you’re much less likely to need or want to sue your employer. My colleagues Jim DeMint and Richard Burr are our leaders in this area, and we should listen to them.

Ladies and gentlemen, in the immortal words of Jimmy Buffet, sometimes you “just gotta learn from the wrong things you done.” The liberals have learned from their mistakes. Let’s learn from ours. Let’s get serious about patient power.

House Majority Leader Dick Armey delivered this keynote address to the Cato Institute conference, “HIPAA after Five Years,” held in Washington, DC on July 31, 2001.