Just like in the 2012 election, every Republican candidate for president wants to repeal the Affordable Care Act. Some of the candidates have even come forward with ideas for replacing it, and we are beginning to get a sense of what Republican health care reform might look like.
Judging from rhetoric alone, Republicans seem to want to achieve what Obamacare has already accomplished.
For example, in a recent op-ed, U.S. Sen. Marco Rubio of Florida wrote that “we need to make affordable, quality health care accessible in the 21st century.” Wisconsin Gov. Scott Walker, for his part, wants to “provide refundable tax credits to individuals who do not have employer-based coverage to make health insurance more affordable,” and to “protect all Americans with pre-existing conditions.”
However, Republicans’ policy ideas are quite different from what’s in the ACA — in expected ways. Republicans want less regulation and lower federal spending. They also want to provide less help for those with low incomes.
Consider, for instance, the various concepts for protecting people with pre-existing health conditions — an idea everyone wants to get behind. The ACA requires insurers to accept all consumers regardless of their health during annual open enrollment periods and prohibits premium surcharges for people who are sick. To discourage people from waiting until they’re ill to buy insurance, the law also takes the unpopular step of requiring most people to buy insurance or pay a tax penalty.
The emerging Republican plans, by contrast, eschew federal regulation of the insurance market. Walker, Rubio and Louisiana Gov. Bobby Jindal have all discussed using state-based high-risk pools, which would theoretically provide affordable coverage to people with serious health problems.
Historically, however, high-risk pools haven’t been effective. Thirty-four states had high-risk pools before the ACA went into effect, and they typically charged premiums 50 percent to 100 percent above prevailing rates for people who were healthy and could get private insurance. Making high-risk pools work requires adequate government funding. So far, candidate proposals have not been specific on how much money would be provided.
Republicans and Democrats also disagree on how to decrease the number of people who are uninsured. The ACA provides premium subsidies for low- and middle-income households buying coverage in the new health insurance marketplaces, which help make coverage more affordable for families with incomes up to four times the poverty level ($97,000 for a family of four). Simultaneously, the law expands Medicaid eligibility to everyone who is poor or near poor (at the states’ discretion, following a decision by the Supreme Court).
The Republican plans issued so far would all roll back the Medicaid expansion and instead cap federal funding for the program, which could lead to reduced coverage for those who are poor.
To replace the premium subsidies in the ACA, Jindal would provide a standard deduction for health insurance, which would help middle- and higher-income taxpayers buying insurance on their own but would be of little use to lower-income people, who are in low tax brackets or owe no income tax at all.
The Walker plan is the most expansive from a Republican candidate so far. It would provide refundable tax credits to people who buy their own insurance, meaning they would receive money back from the government even if they didn’t owe any taxes. The proposed tax credits would vary by age — ranging from $900 to $3,000 — but not by income. They are similar on average to the ACA’s premium subsidies, but they would provide more help to people with high incomes and generally less help to those with low incomes.
Current Republican plans also include other ideas that have been around for a while, such as allowing people to buy insurance across state lines. That, however, is unlikely to increase the availability of insurance much because major insurers typically operate in many states already.
What prevents insurers from expanding their markets is the challenge of putting together price-competitive networks of doctors and hospitals. Permitting the sale of insurance across state lines would not make that any easier, while tending to weaken consumer protections because insurers could set up shop in more lightly regulated states.
Would these Republican approaches work? That depends on your definition of “work.”
When compared with the ACA, the Republican plans would enable fewer people to obtain insurance. And, unlike the ACA, none would guarantee that people with pre-existing conditions would have access to affordable coverage. By these yardsticks, the Republican proposals are not actually “replacements” for the ACA.
If, however, the goal is to scale back regulation and decrease federal spending while also providing help (albeit more modest) to the uninsured and people with pre-existing conditions, then these plans would certainly be considered effective.
For decades it was Democrats who emphasized reforming the health care system, an ambition that was realized when the ACA passed in 2010. Now, with the ACA in place and 16 million more people insured, the tables are turned and it’s Republicans who want to upend the status quo.
Larry Levitt is a health insurance expert and senior vice president of the Kaiser Family Foundation, a nonprofit organization focusing on health issues. The foundation is not associated with Kaiser Permanente. He wrote this article for the Los Angeles Times.