Correction: An earlier version of this article misstated the tax credit Gillespie’s plan would offer to adults ages 35 to 49. It would be $2,100, not $3,000. This version has been corrected.
Virginia Senate candidate Ed Gillespie unveiled a health-care reform proposal Friday, offering an alternative to a law he would like to see repealed.
Gillespie, a former Republican National Committee chairman who is challenging Sen. Mark R. Warner (D), has made opposition to the unpopular Affordable Care Act a cornerstone of his campaign. Democrats have repeatedly challenged Republicans who oppose the health-care law to explain what they would do after a repeal. Gillespie is one of a handful candidates who have done so.
“We can do much better, and my alternative would,” he told about 100 business executives at the Virginia Small Business Partnership Summit in Tysons Corner.
His plan would end the individual mandate to buy health insurance, the health-care exchanges and all of the law’s industry regulations. In their place, he would offer tax credits that increase with age and family size.
Adults younger than 35 would get $1,200 a year. Those 35 to 49 would get $2,100 a year. Those 50 and older would get $3,000 a year. For every dependent child, the credit would increase by $900.
While many individual premiums have gone up under the Affordable Care Act, Gillespie argued that competition — including across state lines — would help lower premium costs in the individual market. Citing Government Accountability Office numbers, Gillespie said the credits would be sufficient to buy coverage in most cases. This GAO report refers only to base rates, noting that actual premiums could be higher. In addition, under Gillespie’s proposal, family plans would no longer be required to cover young adults until age 26.
For those with preexisting conditions, Gillespie proposed that policies could be purchased during specific windows. Parents of newborns would have six months to obtain coverage for them. When children turn 18 or leave their parents’ insurance, they would have six months to get coverage. People who lose employer-based insurance would have two months. Once those policies were in place, they could not be revoked.
“No one with continuous coverage could be dropped from their insurance or be repriced due to a preexisting condition,” he said.
That policy would perform some of the same functions as the individual mandate, Gillespie said: ensuring that people don’t “game the system by going without insurance but then trying to buy it after a costly diagnosis.”
For those with preexisting conditions who can’t afford insurance with a tax credit, Gillespie would set aside $75 billion over 10 years to set up state-run high-risk pools.
Instead of the so-called Cadillac tax on very expensive employer-offered plans, Gillespie would cap the tax exclusion for those at $20,000 per family plan and $8,000 per individual plan.
Medicaid, expanded in some states under Obamacare, would go back to its previous eligibility levels. The 11 million people who the Congressional Budget Office estimates would sign up for Medicaid by 2015 would be eligible for tax credits instead.
The plan is modeled on one created by the conservative 2017 Project. That plan was scored by the Center for Health and Economy as saving taxpayers $1 trillion compared with the Affordable Care Act. The think tank was founded by Douglas Holtz-Eakin, a conservative economist.
Democrats argued that a plan such as Gillespie’s would push too much cost on consumers while exposing them to the vagaries of a less-regulated marketplace.
“Ed Gillespie’s plan would take us back to the days when insurance companies could deny coverage for preexisting conditions, charge women more than men for the same care and impose caps that cut off coverage just when you need it the most,” said Warner spokesman David Turner. “Senator Warner is working to keep what’s good in the health-care law and fix what isn’t.”
This plan would be “very bad for the country, very bad for individuals, and would actually be very bad for the health-care industry as well,” state Sen. George L. Barker (D-Fairfax) told reporters on a conference call.“It would add substantially to the deficit,” he said, by spending on expensive high-risk pools. Such pools were opened as a temporary measure under the Affordable Care Act but wound down this year.
While President Obama is in office, any discussion of repeal is academic because of his veto power. But should Republicans take control of the Senate, retain control of the House and win the White House in 2016, such a repeal could be possible.
Gillespie has been fleshing out his policy proposals as Election Day nears. On Thursday, he gave a foreign-policy speech at George Mason University, criticizing defense cuts. He and Warner debated Tuesday and will again Monday. Polls suggest Gillespie faces an uphill battle against Warner, a popular former governor, but the race has narrowed in the past few weeks.