Republicans Unveil ACA Alternatives

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As the Republican presidential primary race is heating up, the candidates’ plans to repeal and replace Obamacare are receiving increased attention.

Wisconsin Governor Scott Walker announced his plan to repeal and replace Obamacare, “The Day One Patient Freedom Plan,” at a factory in Minnesota on Tuesday. His plan includes a number of policy proposals that have long been popular among conservatives, including tort reform, selling health insurance across state lines, and Medicaid block grants for the states. One of the core aspects of the plan is to replace the ACA’s income-based subsidy formula with a simple age-based tax credit. Another is to prevent individuals with pre-existing conditions from being denied coverage as long as they have maintained continuous creditable coverage, similar to the HIPAA portability rules that existed prior to the ACA.

One day earlier, Senator Marco Rubio teased the three main points of his health care plan this week in an essay for Politico. First, he called for a new system of refundable tax credits to help individuals pay for coverage, and changing the tax preference for employer-sponsored coverage to equal those credits within a decade. Second, Rubio supports interstate insurance sales, HSAs, and high-risk pools (as does Gov. Walker). Third, Rubio pledged to institute a per-capita block grant system for Medicaid and a phased-in premium support system for Medicare that would exempt current participants.

Both of these proposals come well after Governor Bobby Jindal became the first 2016 Republican presidential candidate to announce a health reform plan way back in April 2014. Jindal’s “Freedom and Empowerment Plan” shares a number of attributes with the Walker and Rubio plans, such as incentivizing HSAs, reforming Medicare and Medicaid, and allowing insurance to be purchased across state lines. One notable difference is that Jindal would change the present tax exclusion for employer-provided health insurance into a standard deduction for any form of health insurance. He believes this would slow the growth of health care costs by encouraging individuals to purchase individual policies that cost less than the deduction so they can pocket the difference. Jindal also proposed committing $100 billion of federal funding over ten years to subsidize coverage for people with pre-existing conditions or incomes under 150% of the federal poverty level. Despite the many similarities between the Jindal and Walker plans, the Louisiana Governor criticized Walker’s plan as “Obamacare lite” due to its age-based tax credits for all Americans, rather than just those with a financial need.

All three of these plans also share a number of similarities with the American Health Care Reform Act announced by the Republican Study Committee in April. Commonalities include interstate insurance sales, a standard deduction for health insurance, and support for high-risk pools. One important dissimilarity is that the plan called for the elimination of the employer tax exclusion and self-employed health insurance deduction. The Study Committee’s plan has not gained much traction in Congress and was opposed by the National Association of Health Underwriters.

Although opposition to the ACA is expected to be a main plank in any Republican candidate’s platform, Americans remain split in their attitudes towards the law. A recent survey by the Kaiser Family Foundation found that 44% of Americans view the ACA favorably, while 41% opposed it. Of those who don’t like the law, 28% said they wanted it repealed fully, 28% want it expanded, and 11% want it scaled back.

At the end of the day, debating the finer points of health reform will likely interest only policy wonks, political enthusiasts, and those in the industry. But this issue could gain even more populist appeal in the near future. GOP frontrunner Donald Trump promised in July to do “something terrific” with healthcare. That’s something that should get everyone’s attention.


Photo by Matt used under CC BY-SA 2.0.