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.”

What We're Following See More »
Criminal Justice Reform Bill Clears Senate
1 hours ago

"The Senate passed a bipartisan criminal justice reform bill on Tuesday night, handing a significant victory to President Trump and senators who lobbied to advance the legislation before the end of the year. Senators voted 87-12 on the legislation, which merges a House-passed prison reform bill aimed at reducing recidivism with a handful of changes to sentencing laws and mandatory minimum prison sentences." The House aims to vote on the measure when it reconvenes later this week.

Judge Delays Flynn Sentencing
6 hours ago

Federal Judge Emmet Sullivan "agreed Tuesday to postpone Michael Flynn’s sentencing after a hearing to decide the punishment for President Donald Trump’s former national security adviser went awry." Sullivan gave Flynn a chance to reconsider his decision to plead guilty, adding that he could not "guarantee a sentence without prison time, even after the special counsel’s office recommended that Flynn not be incarcerated. After a brief recess, Sullivan and prosecutors agreed to delay sentencing so that Flynn could "eke out the last modicum of cooperation."

Ducey To Appoint Martha McSally To Senate
10 hours ago
Is White House Caving on Government Shutdown?
10 hours ago

"White House Press Secretary Sarah Huckabee Sanders seemed to endorse a potential spending deal that would include all of the remaining appropriations, including a Senate Homeland Homeland Security bill with $1.6 billion in wall-related funding. But as usual, there was a catch—President Donald Trump might insist on flexibility to use other funds already identified to get closer to his desired $5 billion."

VOTE IS 82-12
Senate Advances Criminal Justice Reform
10 hours ago

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.