For years, Republicans have sniped at the Affordable Care Act without offering a reasonable alternative. Three GOP senators are trying to change that. Richard Burr of North Carolina, Tom Coburn of Oklahoma and Orrin Hatch of Utah have offered an outline of a health-care-reform package that they say could take the ACA’s place.
Given the shrill rhetoric from the GOP side, one might expect that Republican reform would have nothing in common with Obamacare. But there are only so many ways to preserve the patient protections that the ACA offers, which Republicans say they want to keep, while maintaining a private insurance market and assisting those who can’t afford coverage.
Like the ACA, the senators’ plan would insist that insurance companies sell policies to people with preexisting conditions. To keep insurers economically viable despite that demand, the senators, like President Obama, would press all Americans, healthy and sick, to buy coverage. The mechanism would be not an individual mandate but flexibility for insurance firms to charge unhealthy people more if those people hadn’t maintained coverage continuously. That’s arguably a sharper incentive to get covered than the relatively small fines the individual mandate applies to those lacking insurance.
Poor Americans would get smaller subsidies than the ACA offers to help them buy private coverage, but the senators would let them enroll in cheaper, less comprehensive plans. The senators also propose to “auto-enroll” poor people into plans that would cost no more than the subsidy the government would give them — for free, in other words.
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So what’s the problem? The proposal would push people, particularly the poor, toward much skimpier coverage than the ACA offers. Since they could trade up when they got sick, people would have an incentive to avoid paying for more comprehensive plans until they needed them. Those comprehensive plans might well have a less healthy pool and so would become even more expensive. The proposal would offset this effect somewhat by lifting restrictions on tax-free health-spending accounts, but that’s not very helpful for people hovering around the poverty line.
In shaping the ACA, Congress set minimum standards so that people would have access to a range of services, such as mental health care, addiction treatment and prenatal care, in decent provider networks. The individual mandate was intended to ensure that the wealthy and the healthy would help to offset the costs of the poor and the sick, and that doing so would be a social expectation. These are worthy goals, whereas the GOP plan falls short.
As a political matter, too, the senators’ plan may be of limited utility. Democrats wouldn’t agree to displace so much of the ACA, even though the senators’ plan relies on a similar fundamental architecture. Anti-Obamacare fundamentalists, meanwhile, will probably hate the senators’ plan, precisely because of those similarities.
The proposal could have practical value, however, if and when the GOP decides to seek ACA reform in cooperation with Democrats. The Obama administration already is giving some states flexibility in how they extend coverage to poor Americans. If other parts of the ACA fail to launch in hostile states, some pro-ACA health-care experts argue, still more flexibility might be needed to get people covered, which is the most important goal. The senators also propose reducing the tax advantage that employer-provided health insurance spending enjoys. This would be hard. But it would be a more effective cost-containment mechanism than the ACA, reducing the incentive to overspend on health care. It also would raise a lot of money for the Treasury.
It’s a lot safer to attack a big law meant to fix big problems than it is to offer an alternative, particularly when the GOP base is so blinkered. All three senators deserve credit for engaging seriously with health-care policy. Their proposal falls short, but it contains useful ideas. It’s also a reminder that any health-care reform demands trade-offs.