Plainly wounded by the Plum Line’s mockery, some congressional Republicans have finally unveiled a plan to replace the Affordable Care Act with their own health care reform. Is it serious? It’s certainly serious enough to examine and judge on its merits. Will it become the plan around which Republicans will unite? I doubt it, just because it’s hard to imagine Republicans ever uniting around a plan to do anything proactive on health care, though that’s always possible.
What’s really remarkable about this plan is that for all the claims we’ll hear about how it undoes the tyrannical horror of Obamacare, the Republicans’ version of health care reform has accepted most of the fundamental goals and regulatory paths of the law they so deeply despise. This plan — authored by Senators Richard Burr and Orrin Hatch and Rep. Fred Upton — is little more than Obamacare Lite. Though the devil is in the details — and there are some devilish ones — this tells us that Barack Obama has for all intents and purposes won the health care argument, at least as far as it concerns government’s role in health care.
Here are some of the provisions, which I’ve copied from their synopsis:
- Ensure NO ONE can be denied coverage based on their pre-existing condition;
- Prohibit insurance companies from imposing lifetime limits on a consumer;
- Adopt an age rating ratio that limits the amount an older individual will pay to no more than five times what a younger individual pays (5 to 1) as a baseline, unless a state affirmatively elects to have a different ratio;
- Require health plans to offer dependent coverage up to age 26, unless a state opts out of this provision;
- Ensure guaranteed renewability for patients to be able to renew their coverage;
- Create a new “continuous coverage protection” that rewards individuals moving from one health market to another — regardless of whether in the individual, small group, or large employer markets — by allowing them to get a similar plan at a similar cost and not be rated on health status.
In addition, they would reduce the availability of subsidies from their current 400 percent of the poverty level to 300 percent of the poverty level, and repeal the Medicaid expansion but allow poor people not on Medicaid to get subsidies. The subsidies also would no longer be tied to the actual cost of insurance, and they’d be a tax credit instead of a direct subsidy at the point of sale. There’s also a provision replacing the “Cadillac Tax” on high-value plans with a provision removing the deductibility of employer health care plans that cost over a certain level.
If all that’s making your eyes glaze over, consider it this way: Again and again in the Republican plan, what they do is take a provision or principle in the Affordable Care Act and essentially say, “We want to do that too, we’ll just do it a little less generously.” No denials for pre-existing conditions? It’s in there, but there are some important caveats (which I’ll get to in a moment). No lifetime limits on coverage? In there. Young people up to age 26 can stay on their parents’ plan? Yes, but a state could opt out. Subsidies for middle-class people? In there, just up to 300 percent of the poverty level. Coverage for the poor? Yes, just up to 100 percent of poverty instead of 138 percent. Tax on high-value plans? Yep, just in a different way. Government-set limit on how much insurers could vary premiums by age? Yes, but the ratio would be expanded from 3-1 up to 5-1. A mandated list of “essential health benefits” for all plans? Yes, but the states would determine the list instead of the federal government, with more flexibility.
In all these cases, they aren’t looking for some free-market alternative that will supposedly deliver even better results. They’re accepting government’s role in both regulating insurance and in helping people pay for it; they just want to make the benefits not so attractive.
There are a few exceptions. They would repeal both the individual and employer mandates, which by now even Democrats are not particularly enthusiastic about (at this point I think most Democrats would be happy to junk the employer mandate if they got something in return, though the individual mandate could be a different story). And most significantly, the plan abandons the fundamental coverage guarantee the Affordable Care Act provides, while essentially trying to convince you that’s not what it does.
This is a critical point. Under the ACA, no one will ever be denied coverage because of a pre-existing condition. Ever. Medical underwriting, in which insurers comb through your history to see if they don’t want to cover you or if they should charge you huge premiums, is over. The Hatch-Burr-Upton plan is presented as though it does the same thing. Note that bullet point above: “Ensure NO ONE can be denied coverage based on their pre-existing condition.” In their executive summary, this point is the one sentence in the document that is highlighted in bold.
But actually, it’s not quite true. Their plan has a one-time open enrollment period for the uninsured; if you don’t get coverage during that time, you’re out of luck, and insurers will be free to deny you coverage. If you have coverage now but lose it, say because you lost your job, you’d have a limited amount of time (they don’t specify how long) to enroll in a new plan; if that time expired, you’d also be out of luck.
They would probably argue that they’re putting the responsibility on individuals, and all they have to do is take advantage of it. But that’s a very different thing from a guarantee. And that may be the biggest difference between the Affordable Care Act and this plan. The ACA tries to achieve universal coverage, and this plan doesn’t.
Frankly, that isn’t all that surprising, because universal coverage was never a goal conservatives had for health care. In recent days some of them have been arguing for something similar to this plan — see Michael Strain or Ramesh Ponnuru — and what they say about the subject is that they want universal catastrophic coverage, meaning everyone should have access to a bare-bones plan that will cover them not for ordinary medical expenses but only when a major illness or accident brings those expenses to a level that almost no one could afford. Those catastrophic plans are usually paired with Medical Savings Accounts for people to pay for everything else — a more market-based approach.
But the Hatch-Burr-Upton plan says nothing explicitly about catastrophic plans, and it doesn’t claim universal coverage as a goal. Its approach is that coverage will be there if you’re on the ball enough to get it at the right time. And if you aren’t, tough luck.
So there is something of a bait-and-switch going on. On provision after provision, this Republican plan promises to give all the benefits of the ACA, at least the ones that score highly in polls. It accepts that government will regulate health insurance and help people pay for it, even if that help is substantially less helpful. Looking at that, we might say that Republicans have accepted the ACA’s foundation, and that part of the health care argument is over. But they still aren’t willing to move substantially toward universal coverage. The ACA doesn’t achieve universal coverage either (the reasons why are a topic for another day), but it tries much harder to move down that road. So the new GOP “alternative” to Obamacare tells us that some Republicans, at least, have ceded a whole lot of ground in the broader debate over government involvement in health care, but it appears that’s one bridge they aren’t yet willing to cross.