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Rubio, Walker Release Plans to Slay the Obamacare Dragon
As Peter Suderman writes in Reason any Republican effort to repeal and replace ObamaCare is likely going to be disappointing, given both the enormity of the task and the fact that they’ll be starting with a ball further down left field than when the President took office.
Still, there’s room to maneuver and maybe even to reverse the ratchet in a few areas. Last week, Sen. Marco Rubio and Gov. Scott Walker issued fairly similar plans that attempt to do just that (Walker issued a short white paper; Rubio wrote an op-ed for Politico that sketches his ideas, albeit with fewer details).
After repealing ObamaCare, both plans start by removing the single greatest inanity of our system: that insurance purchased through one’s employer is tax-free, while insurance purchased directly is not. This system is virtually unique in the world — a bad example of American exceptionalism if ever there was one. Moreover, making it easier for people to purchase insurance directly not only removes an extraneous layer from the healthcare system but also will reduce a major source of governmental intrusion (i.e., Hobby Lobby).
The Rubio and Walker plans envision expanded health savings accounts, fewer strings attached to Medicare, the opening of national markets, and other modest moves toward returning things toward an actual insurance market and letting states handle more of the details. The government would remain deeply involved in healthcare, but with less direct meddling.
Is this what we want? Would this be acceptable? Before 2008, all of this would have struck me as sensible, if unexceptionable. Now, I worry that — despite the lingering dislike for ObamaCare — Rubio or Walker’s plan may be too radical to happen.
Published in General, Politics
Some reform along these lines is the best option on the table, if Republicans will take it. If they fall for Jindal’s “Obamacare lite” nonsense (and I really hope Governor Jindal also had something to say about Trump’s vague proposals and enthusiasm for single payer?), we’ll get nowhere.
The details of the plan matter less than their broad similarities to each other and to what Paul Ryan is likely to put on the table.
But these plans are real. They would end Obamacare. This could actually happen.
Is conservative media talking about it? Or are talk radio and Fox too busy discussing trivialities, personalities, and conflict to discuss in depth complicated policy that could actually affect people’s lives?
I know, obvious question.
Part of the problem is that, in effect, pre-Obamacare we subsidized three groups of people: the very poor (Medicaid), the elderly (Medicare), and those with reliable jobs (the employer tax credit).
That shafted one group: the people who were trying to be independent but were not established. The self-employed, those between jobs, those working low-wage jobs.
In the ideal conservative world, we would move away from all those subsidies, especially ending the market distortion from the employer tax credit. That won’t happen. We know what Obamacare did — it took that problem, made it bigger, and introduced a fix that isn’t.
Walker and Rubio are proposing to address that problem in a politically realistic way that is as conservative as possible. No mandates, no state exchanges. If I follow the estimates correctly, pretty much everyone should be able to get bare-bones coverage. But that’s all. You’ll hear about how they’re taking healthcare away, and stories of people who will lose coverage. This won’t be easy. But it can be done — unless we decide to live in Jindal’s fantasy-land, and pretend this is no different from Obamacare.
Rubio’s plan isn’t detailed enough to tell, but Walker’s plan seems to answer Mendel’s question. Every American would be able to get health insurance, but they would have the choice not to. If they chose not to, there would be pretty severe potential consequences. You lose the pre-existing condition protection, for one. If you do not have health insurance, and it appears that it would be extremely expensive to get it, you will still have EMTALA protections, but long term care seems to be available only through charity.
But more so than pre-Obamacare? Those consequences seem basically to be “life in the real world” consequences rather than the government forcing you to do this or else.
Of course, the need for coverage won’t bite nearly so much when you have a tax credit without a million strings attached and an actual market. I’m not sure what you mean by “extremely expensive.” Even if you assume prices don’t go down for plans similar to the Obamacare bronze/silver/gold, the end of the mandate combined with that tax credit will create a huge market for high deductible/low premium major medical plans, priced as close to that tax credit as possible.
So in short, Walker is saying: we will ensure everyone can receive some healthcare, but at a safety net level, not a cradle-to-grave level, and we’re not subsidizing based on income.
One thing I like about Walker’s plan is that it’s easy to imagine the transition. No need to wait to see if a website works or not, no need for complicated questionnaires to determine what you’re eligible for, little mystery. That is a major selling point in a general election.
Quite. It would collapse the system over time. And do it in the name of Freedom.
So it would essentially be as fake a promise as the initial one.
Wouldn’t end well — that’s an invitation for the next liberal president to step in to fix things. I’ll take the Walker/Rubio tax credit over that.
Sure. Still, it’s an answer to Mendel’s question, which was also answered affirmatively by support for the 1776-2008 system.
If you don’t maintain coverage, they can discriminate against you for your pre-existing condition (ie., they can act like an insurance company). If you then get sick and need coverage, it will cost.
Yes. Absolutely. But “as close to the tax credit as possible” when your chance of being an expensive client is 100% is not very close to the tax credit.
He ensures that everyone can, but not that everyone will. If you choose to not take advantage of the tax credit and to not get health insurance, even though it’s essentially free to you, which is a position that will cover some people, and you get sick, and you are poor, then you will struggle to get covered, although charitable coverage will likely continue to be extensive.
Right. It’s a little complex for some of the general public to understand, which means that to explain it you’ll generally have to select some elements, which means that you’ll be vulnerable to the “this element doesn’t solve everything” complaints, but it’s good in the substance and it’s adequate as a campaigning tool.
Count me as confused in regards to the objections to selling insurance plans across state lines. All sorts of products which are subject to state-enforced regulations are sold across state lines. Why not health insurance?
States would be incentivized not to enact onerous regulations and taxes as their citizens would buy plans elsewhere and send potential tax revenue into other state coffers. Surely, if they wanted to be total dingleberries about it, state governments would have the option to limit or altogether prohibit outside insurance plans (like Utah prohibits marijuana that’s legal in Colorado to cross into its borders). Given the chance to see the free market in action, I’m hopeful that most, or at least many, voters will decide against protectionism.
Wouldn’t the sensible solution be to eliminate the tax credit that encourages employers to provide health insurance as a benefit and thus tying coverage to employment and distorting the market? That way we can avoid making it illegal to sell a service some people wish to purchase.
Health care =/= health insurance. The massive emphasis on health insurance in the US system enables all manner of subsidies and income redistribution to happen behind the scenes (community rating, pre-existing conditions, etc.). It also tends to concentrate the system in a small number of players, who, of necessity and because we are fallen, conspire with the government against all.
When you hear a candidate say they want to ensure that every American must have access to affordable health insurance, ask yourself why an insurance company has to be involved.
I think I misread you — it wasn’t clear you meant only that it would be expensive for those who hadn’t maintained coverage. What it comes down to is that it provides options for everyone, but still leaves responsibility with the individual.
I think that’s in large part a separate issue. Extending a tax credit to those without insurance from employment is designed to help address that market distortion and could potentially be a first step towards the heavier lift of phasing out that employer tax credit. More so if they made it available to everyone regardless of employment, but maybe that would be more plausible later, when people are used to the system.
This kind of plan would incentivize a shift towards major medical coverage only — and when we already see Minute Clinics and the like on the rise, that could be a healthy thing.
Hahaha. There are some states out there that simply are not rational on this sort of thing. The text book conservative position is to let them and stand aside as they suffer the consequences.
I’ve seen the sausage coming out of the meat grinder in D.C. At least if it’s happening in Olympia I can drive there and hold a sign protesting it. As conservatives I don’t think we should advocate doing things to states for their own good.
Cat’s question is a good one. Are there other products that you do not believe should be purchasable in interstate commerce? Do you believe that, in general, it is wrong for the Federal government to regulate interstate commerce?
Yep, that’s federalism. I want the default to be open trade between the states. Let states opt-out if they so choose and deal with the consequences. I’m sure some, if not many, would do so. Federalism is great at decentralizing power, but we have to live with the fact that many states will use their rights poorly, just as free individuals often do.