IT HAS been more than six years since the Affordable Care Act passed and nearly three years since its major provisions began phasing in. During that time, the rate of uninsured Americans has plummeted to a historic low. Also during that time, Republicans have blamed the law for practically every problem with the health-care system, the economy and more. But they have infamously not united behind a credible alternative.
House Speaker Paul D. Ryan (R-Wis.) seemed to promise better when he announced that he would roll out an ambitious policy agenda this summer. Instead, last week he released an Obamacare alternative that is less detailed in a variety of crucial ways than previous conservative health reform proposals. The outlines that the speaker did provide suggest that it would be hard on the poor, old and sick.
Mr. Ryan’s plan would replace Obamacare with a tax credit available to people buying insurance plans in markets regulated by the states, not the federal government. The proposal does not say how valuable the credit would be, nor the rate at which it would increase. The document also does not predict how many people it would cover, nor how much the plan would cost. The latter is a major question in part because the plan would waste money offering tax credits to everyone, regardless of income. Republican staffers argue that the proposal is just a starting point for discussion. Yet other Obamacare-replacement proposals have included such numbers. The fact that Mr. Ryan’s does not renders the plan difficult to evaluate or take seriously. This many years on, the GOP has no excuse for blank spaces.
The proposal hints that the credit would be sufficient to cover the cost of plans that existed before the ACA. This is not reassuring: Pre-ACA, individual-market insurance plans were often thin, with limited benefits, extensive cost-sharing and other elements designed to deter anyone who might actually need care. Without strong coverage requirements, insurers would have limited incentive to offer plans that appealed to people who may be — or may become — sick. States would be hampered in responding to these issues: The proposal would allow insurers to sell plans across state lines, so the state with the skimpiest regulations would likely set the national standard.
People with money to put into health savings accounts (which the proposal would expand), could cover gaps in thin insurance coverage with tax-advantaged out-of-pocket spending — but this would not be a realistic option for low-income people. As for the old, the plan would scale up the tax credits with age, but it would also permit insurers to raise premiums with age much more than the ACA currently allows. The proposal gives no sense that the two will come close to matching up; as in other conservative plans, those in late middle age could face much higher costs. For the sick, meanwhile, Mr. Ryan’s plan would offer an ultimate backstop by funding high-risk insurance pools. But health-care experts caution that this approach would cost a massive amount of federal money — a fact that has caused Republican lawmakers to balk at policies like it when fleshed out.
At least, Republicans might argue, Mr. Ryan’s proposal would eliminate the hated individual mandate requiring people to buy insurance. Yet it would replace it with an even more coercive system. Protections for those with preexisting conditions would only apply for those who kept continuous health-care coverage. Under the current system, if you fail to obtain health insurance in a year, you might have to pay a penalty of few hundred dollars. Under Mr. Ryan’s plan, the Urban Institute’s Linda Blumberg explains, “If you slip through the cracks, your penalty is you may never be able to get health-insurance coverage again.”