Walker’s healthcare plan is perfect, if you want almost no insurance at all
When I first heard that a new repeal-and-replace-Obamacare plan was coming from Scott Walker, the Republican governor of Wisconsin currently posing as a candidate for president, I set a challenge for myself.
I wrote down every provision I expected to find in the plan, sealed the list in an envelope and locked it in my safe so I could compare my predictions with reality.
In truth, this wasn’t as hard to do as it is to, say, pick six winners on a Sunday football card. I merely thought of every healthcare shibboleth the GOP has promoted over the last five years and bunged them down.
Walker published his plan Tuesday morning. I unsealed my envelope and...I won!
Sell health insurance policies across state lines? Check.
Tort reform? Check.
Provide limited block grants to the states to fund Medicaid? Check.
State-sponsored high-risk pools? Check.
Protect those with pre-existing conditions, but only if they maintain continuous coverage? Check.
Expand health savings accounts? Check.
In short, every nostrum promoted by the conservative and libertarian lobbies (the Heritage Foundation is cited several times), none of which has been shown to make much of a dent in the nation’s population of the medically uninsured and a few of which would work against that goal, is in there.
To be fair, Walker threw in a couple of novel curves. Let’s take them up first. The most notable is a provision to convert the income-based premium subsidies provided under the Affordable Care Act to a system based on age. According to Walker’s breakdown, the subsidies would range from $900 a year for those 0-17 years old, up to $3,000 for those 50-64. The payments are only for those without employer-sponsored insurance.
The loopy irrationality of this proposal can be seen if one contemplates that a 30-year-old millionaire would receive the same grant ($1,200) as one earning $20,000. Under the ACA, the latter would receive $1,939, on average. (You can play with these numbers using the Kaiser Family Foundation’s subsidy calculator.)
Walker doesn’t explain why his formula makes sense in the context of the health insurance marketplace, though he bemoans the fact that under the ACA a 35-year-old woman earning $35,000 would get no subsidy, while she’d get $2,100 from him. Of course, so would a 35-year-old millionaire heiress, but no matter.
Walker also puts in a plug for workplace wellness programs, which he says deliver “incentives for people to adopt healthy behaviors.” One doesn’t commonly see these programs advocated in GOP healthcare plans, and perhaps that’s a good thing. These programs have taken the employer healthcare market by storm, but whether they work is questionable, as I reported here. They may actually cost employers money, net net. And the danger is that they’ll be used by some employers to harass and punish unwell members of their workforce.
Of Walker’s more conventional proposals, the big cheese is selling health policies across state lines. This is a hardy perennial for the GOP--it was part of John McCain’s presidential platform in 2009, but you have to search far and wide to find a single credible healthcare expert who thinks it’s a good idea. Larry Levitt of the Kaiser Family Foundation told Bloomberg News, “if you allow the sale of insurance across state lines with no minimum federal rules, insurers would gravitate to states with little regulation.”
We’ve explained the phenomenon many times, using the example of credit card rate caps. After the Supreme Court allowed credit card issuers to export the rate cap laws of their home states nationwide in 1978, the states with high or nonexistent interest rate caps, such as Delaware and South Dakota, became kings of the credit card industry, attracting the consumer credit subsidiaries of Citibank, Wells Fargo and other big banks. One issuer in South Dakota, which counts its credit card industry jobs by the thousands, even put out a card carrying an annual rate of 79.9%.
Eventually, Congress stepped in to impose some relatively modest consumer protection rules on the industry--in 2009. So it only took 31 years.
So if you want to buy health insurance with no standards whatsoever, Walker’s your man.
“Tort reform”? Another GOP chestnut. Study after study shows that malpractice litigation and “defensive medicine” to avoid it add a couple of percentage points, possibly, to U.S. healthcare costs. The remedies, however, involve barring the courthouse door to worthy litigants, at the expense especially of women and the parents of babies and young children. Who gains? Malpractice insurance companies. But this nostrum remains part of the GOP playlist because it’s aimed at personal injury lawyers, who tend to contribute to Democrats.
Walker does promise that he’ll protect Americans with pre-existing conditions from losing their coverage of facing jacked-up premiums. His idea here, to protect those who maintain “continuous, creditable coverage” from being turned down or charged more, comes from an Obamacare replacement plan promoted last year by GOP Sens. Tom Coburn (Okla.), Richard Burr (N.C.), and Orrin Hatch (Utah).
It’s got a enormous flaw. As I observed then, the most important reason that people go uninsured is because they can’t afford coverage. Those who lose it, often because of a layoff, could be doomed to fall further behind the reach of coverage under the GOP plan because they would have to pay for their own medical expenses in the interim--and those can be ruinous. Let your coverage lapse, and you can be stranded without any reasonably priced coverage at all.
There’s more in Walker’s plan, but really less. The whole package, which is billed as Walker’s “Day One Patient Freedom Plan,” is enveloped in a cloud of chatter about how “Obamacare made an already broken system worse” and deprived you, the American people, of “the full freedom to choose your own health care.”
This is an effort to place rhetoric ahead of reality. The reality is that the Affordable Care Act has brought coverage to some 16.4 million previously uninsured Americans, and imposed valuable coverage standards on their policies and those of many millions more.
Walker plainly is trying to keep his flagging campaign alive not merely by reviving Obamacare as a Republican target after many of his fellow politicians have let it go. But the Affordable Care Act is already deeply ingrained in the U.S. halthcare system, to the great advantage of millions of his fellow Americans. He needs to move on.
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