Behind Ryan, GOP unveils plan to replace ObamaCare

Greg Nash

House Republicans on Wednesday released their long-awaited replacement plan for ObamaCare, drawing a contrast with Democrats and setting off a new round of fighting over healthcare policy.

The plan repeals ObamaCare and includes a range of standard Republican policy ideas, such as providing a tax credit to help people afford coverage, making Medicare more market-based and capping Medicaid payments.

{mosads}However, the plan lacks many details that are crucial for understanding its effect on coverage and the federal budget, including dollar figures for the tax credit.

The Republican plan, spearheaded by Speaker Paul Ryan (R-Wis.), envisions a simpler system than ObamaCare with limited financial assistance and federal spending on healthcare. It allows for less generous “catastrophic” health plans, as opposed to ObamaCare plans, which must cover an array of required elements.

“Increasing health coverage is a worthwhile goal, but the law has increased health care costs, reduced access to providers, and restricted patients’ ability to choose the coverage that best suits themselves and their families,” the plan states.

“In this plan, innovative, market-based, patient-centered solutions replace Obamacare’s one-size-fits-all, Washington-knows-best approach.”

Democrats are dismissive of the GOP proposal, portraying it as an empty exercise.

They note that the plan comes in the form of a white paper, rather than an actual bill, which allows Republicans to avoid the difficult tradeoffs needed to make the numbers add up and the coverage work.

“There are no particular pieces of legislation being recommended by Paul Ryan — none,” Rep. Steny Hoyer (Md.), the House’s No. 2 Democrat, told reporters Tuesday.

“The Republicans, frankly, are very apprehensive, A, that they can’t get agreement among themselves as to what specific bills ought to be and, B, that if the American people find out before the election, they will be defeated.”

The centerpiece of the GOP plan is a tax credit that would help people afford coverage. Unlike ObamaCare’s financial assistance, which is adjusted for people’s income, the Republican tax credit would be based on age.

Democrats argue that this system would give less help to low-income people. Republicans counter that their way is simpler and does not discourage work the way ObamaCare does.

The Republican plan would abolish ObamaCare’s requirements for what an insurance plan must cover and instead give people what would appear to be a smaller tax credit that can help them afford a less-generous “catastrophic” health plan.

The tax credit would be paid for by capping the exclusion of employer health insurance plans from taxation. But the plan does not detail which plans would now be taxed, nor how big the tax credit would be, stifling efforts to assess the exact budgetary effect.

By repealing ObamaCare, Republicans would also be eliminating the law’s ban on insurers discriminating based on pre-existing conditions.

The Republican plan puts forward an alternative system that would only protect people with pre-existing conditions if they already have coverage and are switching plans, not if they were previously uninsured.

For uninsured people, the GOP plan provides a one-time sign-up period where people would be protected, but otherwise Republicans say their system incentivizes people to remain insured without having to resort to a mandate penalty like in ObamaCare.

Aside from that one-time sign-up period, people with pre-existing conditions who are uninsured could get coverage through “high-risk pools,” where the government subsidizes coverage for sick people.

Democrats argue that high-risk pools were tried before ObamaCare and did not work.

“High-risk pools generally haven’t been financially sustainable; they pool sick people with even sicker people — rather than pooling sick and healthy people together, as insurance does — so they tend to require large and growing amounts of state funding over time,” wrote Edwin Park of the left-leaning Center on Budget and Policy Priorities.

The Republican plan calls for at least $25 billion over 10 years for subsidizing the high-risk pools.

Finally, the GOP plan stretches into Medicare and Medicaid as well.

It includes a version of Ryan’s controversial idea to make Medicare more market-based, which Republicans say would make the program more financially sustainable. Democrats have long said the idea would “end Medicare as we know it.”

Under the system, seniors would receive financial assistance to help them purchase a private insurance plan or traditional Medicare.

The plan would also cap Medicaid payments for each enrollee in a state, which Republicans say would reduce federal spending and give more power to states.

Democrats say the caps would simply end up cutting benefits for low-income Medicaid enrollees.

Asked about the lack of specifics in the plan, a senior House GOP leadership aide said those details would be worked out by House committees in 2017, when President Obama is no longer in office.  

“The committees would litigate the specifics of those policies in 2017,” the aide said. 

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