Sen Orrin Hatch (R-UT): The Republican face of health insurance reform.
This past week, the House of Representatives voted for the
56th time to repeal the Affordable Care Act. Not because they have any hope it will pass the Senate—much less get President Obama's signature—but simply so that the freshman Republican class could add "I voted to repeal ObamaCare" to their next round of campaign slogans. But as Dana Milbank wrote, the vote was conducted with a paucity of enthusiasm on the conservative side: The Republicans didn't even have enough members on the floor to fill their time slots. That's because Republican leadership knows that as long as a Democrat occupies the White House, yet another repeal vote does no good whatsoever outside of throwing the freshman class a bone to gnaw on. The real conservative hope for getting rid of the Affordable Care Act lies in the
King v. Burwell case, which will come to the U.S. Supreme Court this spring.
In essence, the King case will determine whether subsidies on the federal exchange are legal, given the exact text of one line in the Affordable Care Act. If the case were being decided on the merits, the plaintiffs would be blown out of the water by the overwhelming evidence of both facts and precedent on the side of the government. The conservative wing of the Supreme Court, however, seems to be looking for any way to gut the Affordable Care Act, and this appears to be the last remaining pathway they have. The problem? Siding with the plaintiffs in the King case would strip subsidies from everyone who bought a plan on the federal exchange, which will end up being millions of people. As of January 16, a full 75 percent of people enrolled in health insurance plans through the exchanges were on the federal system, and of those, 87 percent qualified for subsidies. Doing the math, that means that over 65 percent of people enrolled through the Affordable Care Act would lose subsidies if the Supreme Court sides with the plaintiffs.
Consequently, Republicans are scrambling to provide an "alternative" to the Affordable Care Act in an effort to signal to the Supreme Court that stripping millions of people of the subsidies that make insurance affordable for them will end up not being too politically damaging. More below the fold.
Late this week, a trio of Republican lawmakers—Sen. Orrin Hatch (R-UT), Sen. Richard Burr (R-NC), and Rep Fred Upton (R-MI)—unveiled something designed to be such an alternative. The plan, eerily similar to another plan Republicans proposed last year, is less of an alternative than it is an incomplete repeal. Under the plan, which hasn't even been drafted into formal legislation, there would be no federal exchange. Instead, states would be compelled to set up their own exchanges if they wished to tap into tax credits for qualified plans—though unlike the current Affordable Care Act, subsidies would be only available to those making up to 300 percent of the federal poverty rate rather than 400 percent. Further, the plan would eliminate mandatory coverage of contraception and maternity care, would tax health benefits, turn Medicaid into a block grant, and leave it up to the states to determine whether they wanted to mandate that people up to age 26 could stay insured on a family health plan. In addition, it also allows insurers to charge older policyholders up to five times the premiums they charge younger ones, as opposed to the current 3-to-1 ratio required by law.
As a concept, this plan is a drastic step backward. It eliminates crucial protections for women and young adults, raises taxes, cuts off options for young adults, makes insurance more expensive for the elderly, and puts the onus on states to create exchanges without the federal government available to serve as a backup. And in terms of providing an answer to the logistical nightmare created by a hypothetical King decision, it seeks to do the absolute bare minimum and nothing more.
To begin with, this plan is not a modification of the Affordable Care Act. Instead, it relies on the original bill being repealed, which would have the added effect of removing subsidies from everyone on the state-based exchanges and widening the calamity created by the hypothetical King decision in this scenario. Let's extend the hypothetical and pretend that the Republicans manage to pass this law because Democrats in Congress, as well as President Obama, have a gun to their heads trying to figure out how to mitigate the damage to all the victims of the Supreme Court decision.
Those who made between 300 and 400 percent of the federal poverty level—which roughly translates to between $35,000 and $47,000 for an individual—will see their subsidies disappear, permanently. Everyone else would still be eligible for the tax credits under the hypothetical plan, but insurance would likely be more expensive; the contraceptive mandate would no longer exist, which would mean that insurers could start charging co-pays for birth control plans. Maternity coverage would no longer be de rigueur, meaning that those intending to start or grow families would suddenly find themselves having to pay more for that coverage. And without the premium ratio controls imposed by the Affordable Care Act, middle-aged patients not yet eligible for Medicare would likely find themselves paying much more, regardless of subsidies—especially because the Republican plan would eliminate the individual mandate, thus ending the dilution of the risk pool that served to keep prices affordable for the older and less healthy.
Severe degradations in coverage quality notwithstanding, especially for women, those making 300 percent of the federal poverty level or below might be able to get their subsidies back—but if you have a pre-existing condition, just this once. As the New York Times explains:
The Republican proposal says that "no one can be denied coverage based on a pre-existing condition," but this guarantee would apply mainly to people who had been continuously covered by insurance. For people who are uninsured, the Republican plan envisions "a one-time open enrollment period in which individuals would be able to purchase coverage regardless of their health status or pre-existing conditions."
Again, because Obamacare would be repealed, insurers would no longer be required to cover people with pre-existing conditions. But because Republicans still want to claim that people will not be denied coverage on that basis, the plan gives those with pre-existing conditions a one-time guarantee. Presuming they can afford it at the time, they will have to hold onto it for dear life: the moment they suffer a lapse in coverage from job loss, financial emergency, or any other reason, insurers will be able to deny them coverage once more, just like in the days before the Affordable Care Act.
And ultimately, that's what this new "Republican healthcare plan" boils down to: doing the absolute bare minimum to give political cover to the harm that the King case and the push for repeal will inflict, all while doing the utmost to return to the way things were before the Affordable Care Act was passed. Perhaps we should dub it "the bare minimum we think we had to do to give the Supreme Court cover to violate all precedent and annihilate President Obama's legacy" healthcare plan instead.