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Repeal or Modify: 2016 Field Discusses Future Plans for Obamacare

With the health care debate taking center stage during the first half of primary season, the field of Republican candidates is overwhelmed with proposals aimed at repealing the Affordable Care Act (Obamacare), but often with no specific plan to replace it. Only Louisiana Governor Bobby Jindal, Wisconsin Governor Scott Walker, and U.S. Senator Marco Rubio have put forth semi-specific plans to repeal and replace Obamacare.

On the other side of the aisle, Democratic candidates Hillary Clinton and Martin O’Malley currently stand behind most Obamacare provisions while U.S. Senator Bernie Sanders favors a single-payer system.

However, as far a both sides are concerned, rather than standing behind strict partisan lines, shouldn’t we be addressing the ramifications of repealing or modifying Obamacare? A significant concern that should be addressed is what policy is more beneficial to the American public at this point: repealing and replacing Obamacare or implementing modifications to it? While most Democratic candidates prefer modifications to Obamacare, most GOP candidates strongly favor repealing it.

What alternatives are GOP candidates proposing?

Bobby Jindal released his plan in 2014. However, this gained little traction from those in Washington. Marco Rubio explained his replacement plan for Obamacare in a blog post on Monday while Scott Walker released his proposal on Tuesday. What these plans have in common is that they all focus on some version of fundamental conservative principles for replacing Obamacare — namely, limiting federal government involvement and decentralizing power to the states.

Rather than standing behind strict partisan lines, shouldn't we be addressing the ramifications of repealing or modifying Obamacare?

Jindal’s health care reform gives all individuals the same standard deduction for health insurance, regardless of whether they obtain that health insurance from an employer or on their own. He also advocates block grants for states, health savings accounts, and coverage for pre-existing conditions in a high-risk pool.

Walker’s “Day One Patient Freedom Plan” gives patients tax credits toward the purchase of insurance based on age and only those without employer-sponsored insurance. For example, those under 17 years can receive up to $900 in tax credits, 18-34 years can receive up to $1,200, 35-49 years can receive $2,100, while those between 50 and 64 years of age can receive up to $3,000.

Similar to Jindal, Walker advocates the use of health savings accounts, cross-state insurance coverage, and block grants to states. Those with pre-existing conditions can obtain coverage only if they maintain continuous coverage.

Senator Rubio’s less-detailed plan also favors tax credits for individuals to purchase insurance, cross-state insurance coverage, health savings accounts, a per-capita block grant system, and coverage for pre-existing conditions in high-risk pools. Rubio’s plan eliminates the tax exclusion for employer-sponsored health insurance. This means that the 43 percent of Americans aged 18-64 who obtain their insurance through their employer might end up paying more.

As far as health care reforms go, these three conservative proposals are nothing new.

Block grants were proposed by House Republicans in the hopes of saving money — similar to these three GOP proposals — but do so by cutting funding and often making it difficult for people to enroll in Medicaid.

A common component in all three plans advocates for the selling of insurance across state lines to increase competition among insurance companies. Yet, Larry Levitt of the Kaiser Family Foundation told Bloomberg News that “if you allow the sale of insurance across state lines with no minimum federal rules, insurers would gravitate to states with little regulation.”

As far as cross-state coverage is concerned, Obamacare actually has a provision that goes into effect in January 2016, which will allow states the ability to form compacts with one another to sell policies across borders.

What is missing from the discussion of the GOP candidates on health care is whether or not repealing Obamacare is realistically feasible and pragmatically beneficial. According to the Congressional Budget Office, proposals to repeal the health care law will end up hurting the United States in the long run:

The CBO findings suggest that repealing the ACA would increase budget deficits by $137 million over the 2016-2025 period and the number of nonelderly people who are uninsured would increase by about 19 million in 2016 alone. They also estimate the number of people with coverage through Medicaid would decrease between 30 and 32 million over the same period.

Where do the Democratic candidates stand?

Hillary Clinton said she’d consider modifications to Obamacare, specifically the “Cadillac Tax” provision that goes into effect in 2018. The tax is a 40% non-deductible excise tax on high-cost, employer-sponsored insurance plans.

Clinton explained in a response to the American Federation of Teachers questionnaire, “As president, I would work to ensure that our tax code appropriately advances the health-care interests of lower-income and middle-class families.”

Martin O’Malley wrote in a July 2 response to the AFL-CIO that the tax “may affect far more people than expected and make it more difficult for individuals to get important, comprehensive medical coverage.” The tax is expected to raise $87 billion in revenue.

U.S. Senator Bernie Sanders says he would replace Obamacare with a single-payer health care system like most other advanced democracies utilize.

“We need to expand Medicare to cover every man, woman, and child as a single-payer national health care program,” Sanders remarked.

Interestingly, Sanders might get a version of single-payer in some states due to the inclusion of innovation waivers which would allow states increased flexibility to implement programs beginning in 2017.

With per-capita health care costs higher than other developed nations, health care reform is a significant policy concern for a majority of Americans. In fact, sixty-four percent of Americans agree that reducing health care costs should be Congress’ top priority.

Photo Credit: ACCC News