Walker, Rubio Get Heartburn Over Obamacare Replacement Plans

Specific policy agendas means ammunition for critics from the Right and Left.

CLEVELAND, OH - AUGUST 06: Republican presidential candidates (L-R) Sen. Marco Rubio (R-FL), Ben Carson, Wisconsin Gov. Scott Walker, Donald Trump and Jeb Bush take the stage for the first prime-time presidential debate hosted by FOX News and Facebook at the Quicken Loans Arena August 6, 2015 in Cleveland, Ohio. The top-ten GOP candidates were selected to participate in the debate based on their rank in an average of the five most recent national political polls.
National Journal
Aug. 18, 2015, 9:10 a.m.

Re­pub­lic­an pres­id­en­tial can­did­ates are start­ing to get to the “re­place” part of their pledges to re­peal and re­place Obama­care. Wis­con­sin Gov. Scott Walk­er and Sen. Marco Ru­bio of Flor­ida rolled out plans Tues­day. But with spe­cif­ic policy pro­pos­als comes real scru­tiny and the risk that Amer­ic­ans won’t like what they see.

That quandary has be­deviled the GOP since the Af­ford­able Care Act passed. Re­pub­lic­ans are eager to dis­par­age the law — a sure win­ner with the base — but hes­it­ant to de­tail their own al­tern­at­ive. Any policy must also grapple with the new real­ity cre­ated by the Demo­crat­ic law: up­wards of 20 mil­lion people newly in­sured.

There wasn’t much in Walk­er or Ru­bio’s pro­pos­als that hasn’t floated around con­ser­vat­ive wonk circles for years, but the value is that they have a plan at all. Walk­er read­ily poin­ted that out.

“We’re one of the few can­did­ates to ac­tu­ally put a plan out,” he told sup­port­ers Tues­day in Brook­lyn Cen­ter, Min­nesota.

But he hadn’t even fin­ished speak­ing when the down­side of re­leas­ing an ac­tu­al agenda showed it­self: Louisi­ana Gov. Bobby Jin­dal, one of the oth­er GOP con­tenders to put out a de­tailed pro­pos­al, said in a state­ment that Walk­er’s plan would cre­ate “a new fed­er­al en­ti­tle­ment pro­gram.”

“It is frankly shock­ing that a Re­pub­lic­an can­did­ate for pres­id­ent would au­thor a cradle-to-grave plan like this,” Jin­dal said, de­rid­ing it as “Obama­care lite.”

Along­side the in­ev­it­able snip­ing between can­did­ates, both Walk­er and Ru­bio’s out­lines have ele­ments that are sure to draw scru­tiny from health care wonks and could prove fer­tile ground for their polit­ic­al op­pon­ents.

Both, of course, start with re­peal­ing Obama­care. Walk­er would then of­fer tax cred­its to those who don’t re­ceive in­sur­ance through their em­ploy­er. But the cred­its would be based on age in­stead of in­come, as the ACA’s sub­sidies are. An 18-year-old would get a $1,200 cred­it; a 55-year-old would see a $3,000 cred­it.

Age-based cred­its would be ad­min­is­trat­ively sim­pler than Obama­care’s in­come-based sub­sidies, which re­quire a lot of pa­per­work and veri­fic­a­tion. Also, as Douglas Holtz-Eakin, ad­viser to John Mc­Cain’s 2008 pres­id­en­tial cam­paign and pres­id­ent of the Amer­ic­an Ac­tion For­um, poin­ted out, “age is a rough proxy for med­ic­al needs, so it has some mer­it.”

But they also could be por­trayed as much less gen­er­ous than Obama­care for some Amer­ic­ans, par­tic­u­larly poorer people, said Larry Levitt, vice pres­id­ent at the Kais­er Fam­ily Found­a­tion.

“On av­er­age, the tax cred­its in the Walk­er plan don’t look very dif­fer­ent from those in the ACA. But big dif­fer­ences lurk be­hind the av­er­ages,” he said. “They would be more gen­er­ous than the ACA for high­er-in­come people and those who live in low-cost areas, but less gen­er­ous for lower-in­come people and those in high-cost areas.”

In ad­di­tion, Levitt said, “these cred­its are capped over time, mean­ing they could be­come less gen­er­ous if health premi­ums grow faster than the cred­its.”

Walk­er’s plan also aims to pro­tect people who get sick from los­ing their cov­er­age. In­stead of Obama­care’s guar­an­teed-is­sue and in­di­vidu­al man­date, though, he pro­poses a re­quire­ment that in­surers keep cov­er­ing people as long as they have con­tinu­ously been en­rolled in health in­sur­ance.

Again, the con­ser­vat­ive mer­its seem ob­vi­ous. “It provides an in­cent­ive for young people to get in­to in­sur­ance and main­tain it,” Holtz-Eakin said, “so it is a way to bal­ance pools without an in­di­vidu­al man­date.”

But the pro­pos­al opens it­self up to oth­er cri­ti­cisms.

“In a way, the re­quire­ment that you main­tain con­tinu­ous cov­er­age in or­der to be guar­an­teed in­sur­ance if you’re sick is more oner­ous than the ACA’s in­di­vidu­al man­date,” Levitt said. “If you let your cov­er­age lapse for any reas­on and have a preex­ist­ing con­di­tion, you could be locked out of in­sur­ance for life.”

High-risk in­sur­ance pools for sick people, which Walk­er also pro­poses, “would help, but that would de­pend on how much fund­ing is avail­able to them,” Levitt said. The policy pa­per re­leased by Walk­er’s cam­paign wasn’t spe­cif­ic on fund­ing levels.

Ru­bio’s out­line, offered in a Politico Magazine op-ed pub­lished Tues­day, also has a couple of pro­vi­sions that could be con­tro­ver­sial.

First, he seems to sup­port­ing chan­ging how em­ploy­er-based in­sur­ance, which cov­ers about half of Amer­ic­ans, is treated for tax pur­poses. Right now, em­ploy­er in­sur­ance be­ne­fits are not taxed at all. Along­side Ru­bio’s pro­pos­al for a tax cred­it to help those without em­ploy­er-based in­sur­ance, he said that “we should set the tax pref­er­ence for em­ploy­er-sponsored in­sur­ance on a glide path to en­sure that it will equal the level of the cred­its with­in a dec­ade.”

That would sug­gest a lim­it on the tax pref­er­ence for em­ploy­er-provided cov­er­age. His cam­paign didn’t re­spond to a re­quest for more clar­ity.

The concept has long been pop­u­lar among con­ser­vat­ives and oth­ers — and achieves much of the same ef­fect as Obama­care’s con­tro­ver­sial Ca­dillac tax — be­cause it is ex­pec­ted to drive down health care costs.

But be­cause it would mess with the em­ploy­er-based in­sur­ance that most work­ing Amer­ic­ans rely on, Ru­bio’s plan could be fod­der for at­tacks. The No. 1 rule of Amer­ic­an health care re­form is that most people gen­er­ally like their cur­rent cov­er­age and don’t want it dis­rup­ted; Pres­id­ent Obama at­tacked Mc­Cain in the 2008 cam­paign for pro­pos­ing a sim­il­ar plan, call­ing it “rad­ic­al.”

Ru­bio also en­dorsed mov­ing Medi­care to a premi­um-sup­port mod­el for fu­ture gen­er­a­tions, which would give seni­ors a set vouch­er from the gov­ern­ment and al­low them to pur­chase a private health plan. It’s an­oth­er long­time con­ser­vat­ive goal that Paul Ry­an in­cluded in his House budget for years, and con­gres­sion­al Re­pub­lic­ans are ex­pec­ted to start draft­ing bill text next year in pre­par­a­tion for 2017.

But only 26 per­cent of Amer­ic­ans sup­port the policy, ac­cord­ing to a re­cent Kais­er poll, and Obama fre­quently at­tacked Mitt Rom­ney in 2012 by link­ing him to the Ry­an budget and ac­cus­ing the Re­pub­lic­an tick­et of want­ing to turn Medi­care “in­to a vouch­er sys­tem.”

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