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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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But are insured Americans really eager for Washington's role in managing the broader health industry to expand? Conservatives may take some solace from an ABC News/Kaiser Family Foundation/USA Today survey conducted in September 2006, which found that 88 percent of those already insured were satisfied with their coverage, and 89 percent of the insured were "satisfied with the quality of care they receive." Yet even among the insured, 60 percent were also "at least somewhat worried about being able to afford the cost of their health insurance over the next few years."

Ryan believes the debate is entering its pivotal stage, with health care spending now chewing up around 16 percent of GDP and Democrats proposing a shift toward government-directed care. "My focus is on getting consumer-driven health care," he says. The current employer-based system insulates consumers against price volatility, but it also encourages them to rely on insurance for routine medical bills and to overuse employer-subsidized care, which drives up costs. By promoting this system, the tax code discriminates against those who buy their own private insurance. Ryan puts it bluntly: "The greatest source of health care inflation is the third-party payment system." It makes Americans more wary of switching jobs, lest they temporarily lose their insurance coverage (one of the middle-class anxieties that the Democrats campaigned on in 2006).

How should Republicans respond? Ryan touts two reforms in particular. The first one, prominently championed by Shadegg in the House and South Carolina Republican Jim DeMint in the Senate, would let Americans purchase their health insurance from out-of-state companies. Such competition could depress costs across the board. The other Ryan-backed reform would provide either tax credits or tax deductions for individuals and families who buy private health insurance themselves. President Bush embraced the tax-deduction formula in his 2007 State of the Union Address.

There's just one big problem: Neither of these reforms has traction in the current Democratic Congress. Any hope the Republicans had of ending the tax bias against people who buy their own health insurance died last November. The reforms outlined by Ryan will almost certainly require a GOP majority to pass and a Republican president to sign them into law. When one considers these reforms--supported by Rudy Giuliani and Mitt Romney--and then places them alongside the proposals of Hillary Clinton, Barack Obama, and John Edwards, it becomes even clearer that the 2008 election could be a seminal moment for American health care. As Ryan admits, the Democrats now "have a real chance at meeting their aspirations."

Duncan Currie is managing editor of the AMERICAN.