Burlison's Plan to Fund Healthcare Reform Through Fed Interest Payments

A Republican lawmaker has proposed a plan to fund healthcare reform by redirecting $1 trillion in Federal Reserve interest payments to banks over the next decade.

U.S. Rep. Eric Burlison, R-Missouri, sponsored the Great American Healthcare Act and believes that by stopping the Federal Reserve from paying interest on bank reserves, the estimated savings can help offset the cost of implementing the legislation.

The bill would expand eligibility to Health Savings Accounts, raise yearly HSA contribution limits, require hospitals and insurance brokers to show real dollar prices for treatments and healthcare plans, and extend authority to prescribe low-risk drugs to a broader pool of qualified professionals.

However, experts warn that halting interest payments on bank reserves could lead to higher interest rates and reduce the Federal Reserve's ability to respond to fiscal crises. The Brookings Institute predicts that fewer bank reserves at the Federal Reserve would jeopardize its ability to respond to such events.