(Bloomberg View) — One can imagine all sorts of Republican health care plans that might now be under consideration if John McCain had won the election in 2008, or if Obamacare had failed to pass. (Of course, one can also imagine that there would be no plan at all, other than “Let’s not talk about it.”)
Few of these plans — including “Let’s not talk about it” — are now feasible. Taking something away from people is several orders of magnitude more difficult, politically, than giving them a new benefit. Which is why the Obama administration had to engage in … er … lies seems so bald … let’s say exorbitant exaggerations such as “If you like your plan, you can keep it.”
So if the Republicans want to get rid of Obamacare, they have to actually come up with something that can semi-plausibly be presented as a replacement. Over the last few years, they’ve settled on a bunch of pieces that make up the cornerstone of their approach:
Limiting the tax subsidy for employer-sponsored health insurance; Selling health insurance across state lines; Tort reform; Tax-advantaged health savings accounts; Flat (though age-rated) refundable tax credits for purchasing health insurance; Allowing insurers more flexibility to charge different prices by age group; Getting rid of the mandates (individual and employer), community rating, and guaranteed issue, as well as a lot of the regulatory mandates for benefit levels; Guaranteeing renewal and portability — which is to say, if you had insurance, and you get sick, you can still buy insurance at normal rates, not rates that are risk-rated for your illness; High-risk pools for people who didn’t have insurance when they got sick, but now want to buy it; Block granting Medicaid for states who want it.
These things form the core of the new Republican plan released Wednesday.
Though “new” is kind of a strong word; most of this stuff has been around for a while.
Some of these proposals are good ideas, like relaxing the mandated benefits — which had sounded great at first, until you realized that every one of those benefits needs to be paid for in the form of higher premiums — and breaking some of the links between employment and insurance.
Some of them, like replacing the “Cadillac tax” on high-cost plans with a cap on the tax subsidies for employer-sponsored health insurance, represent a regression from what Obamacare achieved. (While I’d prefer a cap to the unwieldy and opaque Cadillac tax, the Republican plan seems to set the cap too high, meaning it will do less than the Cadillac tax does to move America away from this ridiculous tax boondoggle).
Would the Republican plan work? Define “work.” If this plan passed, could it operate roughly as described? Probably, yes. I would have some worries about adverse selection with the mandate gone — but given that being able to obtain cheap coverage in the future relies on obtaining it now, not that many worries. Of course, the numbers are not very specific, so we don’t know how much it would cost.
Could such a plan win approval by Congress? Ummm, maybe. Two factors weigh in its favor: first, the fact that after selling Obamacare as a program for middle-class families who were anxious about losing their coverage if something went wrong, Democrats delivered a plan that made a lot of middle-class families worse off, and few of them better off.