Republicans had a plan to replace Obamacare. It looked a lot like Obamacare.

July 25, 2013
patients_choice_act
Sens. Tom Coburn (R-Okla.) and Richard Burr (R-N.C.), first and third from left, introduce the Patients' Choice Act with Reps. Paul Ryan (R-Wis.) and Devin Nunes (R-Calif.), second and fourth from left. (Burr's office)

Remember "repeal and replace"? That was the Republican party's 2010-vintage response to the Affordable Care Act. It wasn't that they opposed the idea of universal health care; they just thought that the Obama administration and their allies in Congress went about it the wrong way. They wouldn't just repeal the bill. They'd replace it with something better.

But what? The Romney campaign was very vague on this point, and the few points of commonality Congressional Republicans have on the issue don't add up to a full replacement. Four years ago, however, they did. It was called the Patients' Choice Act, it was proposed by Sen. Tom Coburn (R-Okla.) and Rep. Paul Ryan (R-Wis.), two of the most influential Congressional Republicans on the issue, and it was a credible way of covering almost all Americans; the House bill got 13 co-sponsors (nine of whom are still in office) and the Senate bill got seven (six of whom are still in office).

Here's how it would have worked:

• States would open health insurance exchanges where individuals and small businesses could buy coverage.

• Insurance plans on the exchanges would have to provide a base level of coverage set by the federal government.

• Insurers couldn't turn down customers, including because of preexisting conditions (guaranteed issue).

• Individuals and families would get a refundable tax credit to pay for insurance.

• That tax credit would be financed in part by limiting the tax exemption on employer-provided insurance.

If that sounds familiar, it should. Those are all sentences that accurately describe both the Patients' Choice Act and the Affordable Care Act. There are plenty of differences, of course. Obamacare expands Medicaid; the Patients' Choice Act restricts it to low-income disabled people, moving the rest of its beneficiaries onto private insurance. Obamacare cuts Medicare provider payments; the Patients' Choice Act mean-tests premiums and does competitive bidding for private Medicare Advantage plans.

Obamacare has individual and employer mandates; the Patients' Choice Act instead auto-enrolls people in state exchanges when they do stuff like get driver's licenses or register their cars (Duke economist Donald Taylor calls this a "soft individual mandate"). Obamacare limits the tax exemption on employer-provided insurance by taxing expensive employer-provided plans; the Patients' Choice Act eliminates it for income taxes while keeping the payroll tax exemption.

Those are real differences. But they aren't huge ones; the Patients' Choice Act actually credits the idea of converting the employer health exclusion into a refundable credit — a hugely progressive shift —  to Jason Furman, now chairman of Obama's Council of Economic Advisors, who was involved in the health reform process at the National Economic Council. The Patients' Choice Act and Obamacare are both operating within the same basic framework.

That isn't a coincidence. Obamacare bears a heavy resemblance to basically every real universal health-care plan that Republican legislators have proposed in the past half century, including the Patients' Choice Act, Sen. John Chafee's (R-R.I.) plan offered as an alternative to Hillarycare in 1993, and the universal plan Richard Nixon offered at the end of his presidency.

All four provide new subsidies for low-income families who make too much to get Medicaid. All use either a nudge (the Patients' Choice Act's "auto-enrollment") or a push (Obamacare and Chafee's individual mandates) to get universal coverage. All but Nixon's feature state exchanges, include guaranteed issue provisions, and limit the employer health exemption in some way:


Embracing the Patients' Choice Act now, then, runs into a tricky PR problem. Republicans could look like they have a plan to replace Obamacare, as they'd likely frame it. But it could just as easily be pitched as a right-leaning fix to the act that doesn't muck with its overall approach. That could be an awkward sell.

The Patients' Choice Act also runs into a problem in that its coverage provisions cost significantly more than Obamacare's. According to the Tax Policy Center, swapping the employer tax exclusion for a $2,300 per individual, $5,700 per family refundable tax credit, as proposed by the Patients' Choice Act, would cost $1.7 trillion over 10 years. Obamacare's coverage provisions, by contrast, cost about $1.2 trillion over 10 years. You'd need to make up that revenue somehow, or else accept bigger structural deficits, for the plan to work.

I asked Ryan and Coburn's offices if they're still on board. A Ryan spokesman said he is: "You’re right to note that Republicans put forward alternative solutions and Democrats ignored them (well, except Wonkblog) before they jammed Obamacare into law. Chairman Ryan believes the Patients’ Choice Act would have actually addressed the main drivers of health-care costs. Going forward, he believes similar common-sense solutions would be superior to the Obamacare trainwreck."

I haven't heard back yet from Coburn — or from Sen. Richard Burr (R-N.C.) or Rep. Devin Nunes (R-Calif.), who also backed the legislation — on his current views. But Ryan's support suggests this idea has at least some purchase in the conference. We'll see whether future repeal-and-replace efforts reflect that. Update: Nunes' office says he still supports the legislation.

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