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Wisconsin's Paul Ryan has emerged as a major policy influence pushing for health care reform.

Oct 1, 2007, Vol. 13, No. 03 • By DUNCAN CURRIE
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Like many other House Republicans, Wisconsin's Paul Ryan felt deeply torn over the 2003 Medicare prescription drug bill. He was loath to endorse a massive new entitlement program, given the already parlous future of U.S. retirement spending. But Ryan also viewed Health Savings Accounts (HSAs), the bill's most notable free-market element, as a vital means toward establishing "a beachhead against socialized medicine." Indeed, he had sent a letter to House conferees urging them to include HSAs in the final legislation. With an HSA-only bill impractical--Senate Democrats would have staged a filibuster--Ryan accepted the tradeoff and voted to approve the Medicare Modernization Act.

"I was very mixed," he says today. "I made my decision as I came to the floor." He ultimately "felt an obligation to support it, given that they answered my demand for HSAs." Nearly four years later, Ryan stands by that decision, noting that the new "Medicare Advantage" subsidies encourage seniors to get their benefits from private insurers. He also lauds tax-free HSAs as "one of the best things" the Republican Congress achieved in the last decade. "It's put us on offense on health care for the first time in 20 years."

Elected in 1998, Ryan, 37, is one of a small number of GOP House members with a passionate interest in revamping the U.S. health care system. A self-described "Dick Armey conservative," he regrets that the party has lost its "fiscal brand" through profligate spending and corruption. Shortly after the 2006 election, Ryan vaulted over a dozen Republicans with more seniority to become the ranking member on the Budget Committee. Known for his wonkishness and collegiality, he insists that restoring a "limited-government philosophy" is essential to regaining power and complains that "this notion of 'big government conservatism' is what got us in trouble."

But Ryan also recognizes that Republicans must not be complacent about spiraling medical costs. In April 2005, when he introduced legislation to provide health care tax breaks for small businesses and the uninsured, Ryan said the "skyrocketing" cost of insurance was "the biggest domestic crisis facing most Americans today. It affects our jobs, our economy, and our families' way of life. We have to get a handle on this problem." His aim is to forge a credible, coherent Republican alternative to the Democrats' vision of increased government control.

He emphasizes the need for market-based reform. "About a dozen of us care about this issue greatly," Ryan says of his GOP House colleagues, citing in particular Louisiana's Jim McCrery, the ranking Republican on the Ways and Means Committee, and Arizona's John Shadegg, who formerly chaired the Republican Policy Committee. With Democrats pushing hard for "universal coverage" and broader regulation of private insurance, more and more Republicans are realizing that, as former Bush adviser Karl Rove stressed in the Wall Street Journal last week, "This is a debate Republicans cannot avoid."

They may face an uphill battle. In late February, a New York Times/CBS News poll asked which of four domestic policies "is most important for the president and Congress to concentrate on right now." Whereas 55 percent of respondents said "making health insurance available to all Americans," only 11 percent said "reducing taxes." (Nineteen percent said "strengthening immigration laws" and 13 percent said "promoting traditional values.") When asked to choose between the two parties, 62 percent said the Democrats were "more likely to improve the health care system." Only 19 percent said the Republicans.

In that same poll, 90 percent of Americans said the system either requires "fundamental changes" (54 percent) or needs to be completely rebuilt (36 percent). Roughly as many people (89 percent) were either "very" (52 percent) or "somewhat" (37 percent) concerned about future health care costs. Seventy percent also considered it a "very serious" problem that millions of their countrymen lack health insurance. Most discouraging for market-oriented conservatives like Ryan were the 64 percent who agreed that "the federal government should guarantee health insurance for all Americans."

The popularity of the new Medicare prescription drug plan is also telling. As the Washington Post reported in late November, "Polls indicate that more than 80 percent of enrollees are satisfied, even though nearly half chose plans with no coverage in the doughnut hole, a gap that opens when a senior's drug costs reach $2,250 and closes when out-of-pocket expenses reach $3,600." The entitlement program "has proven cheaper and more popular than anyone imagined."