JEB BUSH released a health-care plan last month that would disassemble Obamacare’s “three-legged stool” — its federal mandate requiring all individuals to carry health insurance, its ban on insurance companies denying or pricing out people with preexisting conditions, and its subsidies to help people buy coverage. In its place, he would assemble a flimsier one.
Like other notable GOP Obamacare replacement plans, the core of Mr. Bush’s is a federal tax credit for all people lacking health-care coverage from an employer. The credit would not enable low-income people to buy comprehensive health-care plans of the quality Obamacare requires and helps needy people afford. Instead, it would enable them to buy low-value, highdeductible “catastrophic” plans that protect against high-cost medical events. To help people finance everyday medical costs, Mr. Bush would dramatically increase the amount of money people could put into tax-advantaged health savings accounts.
The hope is that people would be thriftier health-care consumers if insurance companies paid fewer bills for them. The danger is that people would simply forgo needed care — or spend huge portions of their income on it. This would be particularly risky for low-income people, who can now get comprehensive coverage but would likely be shunted into catastrophic plans under Mr. Bush’s scheme. Health spending accounts would help high-income people avoid taxes, but they wouldn’t much help people lacking spare wages to deposit into them. At the same time, Mr. Bush’s tax credits would shower aid on everyone, including the wealthy, without regard for need. If he better targeted the credits, there would be more resources available to help needy people afford something more than bare-bones coverage.
Bush aides respond that the states, not the federal government, would solve some of the toughest issues in health care, such as ensuring that the poor and the sick have access to adequate coverage or reining in health-care costs. Mr. Bush would take the money the federal government sends to states under various health programs, such as Medicaid, and consolidate it into large block grants that the states would get only if they met several conditions. States would have to provide some protection for people with preexisting conditions, perhaps through funding high-risk pools for sick patients. They would have to report on access to care and health outcomes among low-income people, they would have to develop a “transition plan” for those currently benefitting from Obamacare, and they would have to develop plans to tame health-care costs.
The idea is to require states to meet outcomes, not tell them how to get there. Bush aides insist the states would “deliver more with less” by cutting waste and slowing growth of health-care costs. But they don’t say how much money states would have to save, how much they would get from the Treasury or how many people would ultimately be covered under the plan. Without these and other specifics, the proposal is hardly more than wishful thinking.
Mr. Bush would drag the country through another massive policy transition in order to reduce the value of health coverage now available to vulnerable people. He would enact a plan premised on the hope that the states will solve all of the hardest problems. If this is the alternative, better to keep Obamacare and move on.