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.”