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View: How to spot a worthwhile Obamacare replacement plan

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(Bloomberg View) — Trying to repeal the Patient Protection and Affordable Care Act (PPACA) — Obamacare — has long been a popular (if futile) Republican pastime. Now replacing Obamacare is catching on, at least among Republican presidential candidates. This would count as progress, except that none of their proposals quite meets the definition of “replacement.”

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The whole point of health care reform is, or should be, relatively straightforward: providing the best possible health insurance to the largest possible number of people at the lowest possible cost. How do the candidates’ various proposals fare under these criteria?

Under Wisconsin Gov. Scott Walker’s plan, released Tuesday, 6 million more people reportedly would have private health insurance than under Obamacare. How many would lose government-sponsored coverage, however, is left for voters to guess. Sen. Marco Rubio’s outline, also unveiled last week, doesn’t mention the effect on insurance levels at all. But it’s unclear how any plan that rolls back the expansion of Medicaid, as both plans do, could insure as many people as Obamacare does through other means.

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It also seems likely that the quality of that insurance, measured in the breadth of services covered and the share of costs borne by beneficiaries, would be lower, considering that Rubio and Walker would, among other things, lift Obamacare’s provisions for essential benefits. Universal health insurance isn’t achieved by giving more people access to insurance plans that don’t cover their basic medical needs at an out-of-pocket cost they can afford to pay. There are certainly ways to streamline and improve insurance-market regulations. But operating without any rules is no solution. Nor is leaving coverage requirements to the states and hoping for the best.

As for the other candidates, Louisiana Gov. Bobby Jindal has a plan that includes replacing the tax exclusion for employer-sponsored plans with a standard tax deduction, but that is unlikely to maintain Obamacare levels of coverage. Ohio Gov. John Kasich says everyone should have health insurance, and he supports the expansion of Medicaid, but he says he doesn’t like mandates. Donald Trump says he would replace Obamacare with “something terrific,” and it would involve hospitals.

Finally, there’s the question of cost. The Congressional Budget Office has repeatedly said that repealing Obamacare would add to the deficit, because the law’s tax increases and cuts in Medicare raise or save more money than its new benefits cost. So to qualify as an improvement, any alternative proposal needs to reduce the deficit more than Obamacare does (about $137 billion over 10 years), while still covering the same number of people.

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There’s nothing precious about Obamacare. It’s a massive, complicated and typographically challenged piece of legislation, whose shortcomings are significant and which requires more work. If a presidential candidate from either party can devise a better way to provide the same level of coverage to the same number of Americans at equal or lower cost, in a package that is likely to pass Congress and survive court challenges, great.

But replacing Obamacare with something that accomplishes less would not be progress.


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