Current Events Public Policy

Guide to the Republican Candidates

So you’re a Republican and you don’t know who to vote for. Which of the Republican candidates has the best plan for health care reform? This is what I will discuss today.

If you are a Democrat, please read my “Guide to the Democratic Candidates” yesterday.


Almost all the Republican candidate are in agreement on the following issues:

  • Do not expand SCHIP.
  • No insurance mandate, although Mitt Romney did provide over an insurance mandate while he was governor of Massachusetts.
  • Decrease Regulation. Most Republican candidate voiced support for an individual’s ability to buy insurance from out-of-state providers and to simplify state and federal insurance regulations. All the candidates would give states more freedom to come up with innovative health care solutions.
  • Medical Malpractice award caps. Almost all the candidates, with the exception of Ron Paul, support caps on the amount of money that can be awarded through medical malpractice. This should drive down the cost of malpractice insurance.


A chart will be helpful here (ordered from most to least votes in Iowa caucus).


Huckabee Romney Thompson McCain Paul Giuliani
Insurance mandate? N N N N N N
Expand SCHIP? N N N ? N N
Guaranteed issue? N N N N N N
Community Rating? N N N N N N
Insurance subsidies? Y Y N Y N Y
End tax deductability of employer-provided ins? N N N N N N
Begin tax deductability of individual ins? Y Y N Y Y Y
Regional Purchasing N N N N N N
Allow drug imports? ? ? N Y Y N
Expand HSA? Y N N Y Y Y

The Republican candidates seem much more satisfied with the status quo than the Democrats. Philosophically, Republicans want to put more health care decisions into the hands of consumers. Thus, most candidates support making individually-purchased health insurance tax deductible with the exception of Fred Thompson. Rudy Giuliani would allow a standard tax deduction of $15,000 for families and $7,500 for individuals.

Huckabee, Romney, McCain and Giuliani would all give poor individuals subsidies to purchase health insurance, but none claim that they will end Medicaid. Likely, they would offer low income families the option of purchasing health insurance with a subsidy or possibly the ability to opt out of Medicaid. Thompson and Paul do not support these subsidies.

One would think that free-market Republicans would support the right to import drugs, but only McCain and Paul believed this was a good idea.

Health savings accounts (HSAs) were very popular as well. Many candidates supported allowing the creation of an HSA without having a high-deductible health plan (HDHP). Romney and Thompson did not explicitly support this idea, but they were not against it either.

Healthcare Economist’s Take

Most Republican candidates believe that less–not more–government involvement is the best way to cure what ails the healthcare system. While I am sympathetic to this line of thought, pure political ideology will not improve the healthcare system.

Huckabee calls for a “complete overhaul” of the health care system but only does not really offer concrete solutions. His plan to increase HSAs is widely shared by almost all of the candidates. I am not sure why HSAs are a good idea. They limit the liquidity of consumers income. This means that only individuals with large savings (i.e.: the rich) will be able to take advantage of HSAs while the liquidity constrained poor will need to have their money available for food, utilities, gas clothes and shelter and will not be able to benefit from HSAs.

Despite significant health care reforms in Massachusetts, Romney’s national health care reform plans are meager: make health care expenses and insurance premiums–including nongroup policies–tax deductible.

Thompson’s health care plan is basically to be content with the status quo.

McCain gives the most detailed healthcare plan. Like Barak Obama, he wants to create national standards for measuring and recording treatments and outcomes. He also supports clinics in retail outlets (e.g.: Minute Clinics) and the expansion of the role of nurse practitioners and physician assistants, and a $2,500 tax credit ($5,000 for families) to increase incentives for insurance coverage.


Ron Paul is the most radical candidate. He wants reduce the role insurers–especially HMOs—play in the financing of healthcare. He wants patients to be responsible for paying the first dollar of health care. Despite his qualifications as a physician, Paul does not offer very creative solutions to the healthcare problem. While he is a libertarian, he does not propose any limits on Medicare or Medicaid and in fact wants to expand government coverage to include alternative medicines.

While McCain supports a tax credit, Giuliani supports a tax deduction of $15,000 Family, $7500 health insurance deduction. This helps those with a higher marginal tax rate more (i.e.: the rich) and the poorest individuals who don’t pay tax will not even benefit from this legislation. Giuliani does advocate a Health Insurance Credit for the poor as well and poor individuals could use these funds–as well as funds from Medicaid or their employer–to purchase private health insurance.  Any social program that gives money to the poor and then tells them how to spend it–on this case on health care–must be compared against a simple government cash transfer program.

The Healthcare Economist Democratic Pick: McCAIN

While little separates the Republican candidates in terms of their view on health care reform, I would support John McCain.  I am strongly in favor of importing pharmaceuticals from other countries and innovative medical delivery systems such as the Minute Clinics.  McCain supports both of these initiatives.  Also, McCain has a $2500 tax credit ($5000 for families) for all Americans and this will help to eliminate the bias toward employer-sponsored health insurance. 

Rudy Giuliani has a very similar health care reform proposal as McCain, but does not support the importation of pharmaceuticals from developed countries.  Further, Giuliani’s tax deduction is regressive compared to the McCain tax credit which is a more proportional subsidy for everyone (although Giuliani does offer a Health Insurance Credit for the poor).  I am partial to Ron Paul’s libertarian leanings on many issues, but trying to eliminate third party payers is not a feasible solution to the healthcare crisis, especially when catastrophic illnesses are so expensive.

Candidates’ Statement on the Health Care Issue