Editor's note: We published a new version of this story with updated information on Feb. 26, 2010. Read our more recent report, "GOP health care reform: A simple explanation, updated."

With the House of Representatives nearing a vote on the Democrats' health care reform bill, Republicans this week unveiled their own version, a much smaller bill (219 pages vs. the Democrats' 1,990) with a more limited scope. It relies on bedrock GOP principles of consumer choice, no tax hikes, limited government involvement and caps on lawsuits. But it would have limited impact. Where the Democratic bill is projected to reduce the number of uninsured people by 36 million by 2019, the GOP bill would reduce it by only 3 million.



We examined the Democratic plans with our article, Health care reform: A simple explanation , so here we'll take a similar look at the Republican bill.



Here's an overview of the Republican plan and how it differs from the Democratic version:



• More limited reach for the federal government . This is perhaps the biggest difference between the two bills.



Consistent with Republican complaints that the Democratic bills represents a government "takeover" of health care, the GOP bill has no public option — that is, no government-run insurance program, or anything remotely like it. Nor does the GOP bill include an expansion of the federal-state Medicaid health insurance program for the poor. The House Democratic bill has both.



The GOP plan has no health care exchange, the government-run marketplace for people who are now uninsured, and it has no Health Choices commissioner, the new post that would run the exchange. And consistent with Republican fears of government moving toward a system of deciding what treatments patients can receive, the GOP plan, unlike both the House and Senate Democratic bills, does not foster "comparative effectiveness" research that tries to determine which treatments are the most effective.



• No new taxes . Living up to a key Republican principle, the GOP bill would not impose any new taxes. By contrast, the House Democratic bill would impose a surtax of 5.4 percent on married couples earning in excess of $1 million annually, or individuals making more than $500,000 a year. Under the Senate Finance Committee bill, certain health plans that offer comparatively generous benefits would be taxed. Those taxes would go to subsidies to help low-income people buy health insurance and other health care expansions.



• No cuts to Medicare . Republicans, who have seized on proposed Democratic cuts to Medicare Advantage, would not touch the government health care plan for senior citizens. By contrast, both Democratic bills would cut Medicare Advantage and reduce the growth in Medicare payments by a total of roughly $400 billion over 10 years. Many of these cuts would involve Advantage plans, which are private plans operating under the Medicare system. These plans are reimbursed by the federal government at a higher rate, and Republicans maintain that seniors who belong to these plans would see reductions in benefits under the proposed cuts. But Democrats seeking places to cut costs see Medicare Advantage plans as a target, arguing that they are essentially subsidized to an unnecessary degree by regular Medicare beneficiaries and ordinary taxpayers. They have said the cuts in the growth of Medicare payments will not hurt benefits.



• Medical malpractice reform . Republicans have long sought to curb medical malpractice lawsuits, which they say needlessly raise health care costs. The Republican bill curbs malpractice lawsuits by capping noneconomic and punitive damages and making changes in the allocation of liability. The Democratic bill does not.



• Favoring consumer choice over a guaranteed safety net and minimum benefits . The Republican plan would try to expand coverage and reduce costs voluntarily, primarily by increasing consumer options, rather than the Democratic method of using government leverage (such as mandates, penalties and subsidies) to corral more uninsured Americans into obtaining coverage.



The Republican bill would allow Americans to buy health insurance across state lines, something that is currently not allowed, and would allow small businesses to pool insurance coverage through trade associations, an option only allowed for larger companies and labor unions today. The bill would also expand the use of health savings accounts, which allow allow people to use pre-tax dollars to pay medical expenses. None of these programs would be mandatory.



Finally, the Republican bill would offer aid to states to establish "high-risk pools," groups of sicker (and thus more expensive) patients who typically have trouble finding insurance today because of restrictions on pre-existing conditions. It would also boost state-based reinsurance mechanisms that can help insurers that find it too costly to insure such pools.



Democrats, by contrast, would make a more strong-armed effort to reduce the uninsured. Whereas the Republican bill would offer incentive payments to states that manage to reduce premiums and the number of uninsured, Democrats would make everyone purchase insurance coverage or else pay a stiff penalty if they don't. Businesses of a certain size would also have to provide health coverage for their workers or face a penalty. And the Democratic bill would establish minimum benefit packages and expand existing safety net programs such as Medicaid.



The Congressional Budget Office, a nonpartisan group that estimates the cost of legislation, has confirmed that the bill is quite inexpensive in comparison to the Democratic approach.



The CBO found that the insurance provisions of the Republican bill would cost about $61 billion between 2010 and 2019 — a far cry from the $1.06 trillion cost during the same period under the Democratic bill. But when new revenues and spending cuts are factored in, the Democratic bill would reduce the deficit by $104 billion over 10 years, compared with $68 billion for the Republican bill.



The CBO also confirmed that the cost of health insurance premiums would fall under the Republican plan, partly because of the medical malpractice reforms. In the market for individually purchased insurance policies, premiums would fall by 5 percent to 8 percent by 2016. For smaller businesses, premiums would fall by 7 percent to 10 percent. And in the large group market, for larger employers, they would fall by up to 3 percent.



Critics have focused on a few aspects of the bill:



• It doesn't do much to reduce the uninsured population . By 2019, the number of uninsured would drop by 3 million, leaving 52 million nonelderly Americans uninsured. That means 83 percent of legal non-elderly residents would have insurance coverage by 2019, roughly the same as it is today. The comparable coverage rate for the Democratic bill is 96 percent. The Democratic plan would reduce the uninsured by 36 million, leaving 18 million without coverage.



• It might reduce consumer protections . The flip side of several of the Republicans' new consumer options is a decrease in regulation. If insurance policies are sold across state lines, critics say, there could be an incentive for insurers to locate in the least-regulated states, allowing them to scale back coverage. And the Republican bill, unlike the Democratic bills, doesn't specifically bar insurers from excluding pre-existing conditions, even though that policy has broad support in both parties.



• Its idea of boosting high-risk pools for sicker patients may not be effective . The states that have tried high-risk pools in the past have not found them to be popular, largely due to the high costs for the consumer. In theory, experts say, such pools could be subsidized enough to make premiums low enough to be attractive. But it would be expensive to do so, and many experts say the Republican bill doesn't provide enough money to make them work. The Republican plan calls for $25 billion in funding through 2019.



• It misses an opportunity to trim Medicare spending . Health care experts have long pointed to the need to rein in the growth of Medicare spending, because if nothing is done, it could eventually eat up an enormous share of the federal budget. The Republicans' current stance of protecting Medicare Advantage may be politically popular among senior citizens, but critics say it allows the most generously reimbursed portion of the Medicare system to continue unabated, effectively delaying the fiscal day of reckoning for the program. (While the Democrats do propose cutting Medicare Advantage, and while they would impose permanent reductions in certain payment rates to the tune of $229 billion over 10 years, some critics have called their approach too timid as well.)