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Jeb's Obamacare Repeal-And-Replace Plan Is More Repeal Than Replace

The Huffington Post The Huffington Post 13/10/2015 Jonathan Cohn
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Jeb Bush on Tuesday will introduce a plan to repeal and replace the Affordable Care Act.

But “replace” may not be quite the right word.

The Bush plan calls for a familiar mix of conservative ideas on health care, according to campaign documents obtained by The Huffington Post. It would eliminate the coverage scheme of “Obamacare” -- the tax credits, regulations on insurance, and individual mandate that have led to a historic reduction in the number of uninsured Americans.

In its place, Bush would introduce a new kind of financial assistance for people buying insurance on their own -- specifically, tax credits pegged to age but not to income, and not designed to guarantee access to the same level of coverage as Obama’s health care program does.

The Bush plan also would give control of Medicaid, the insurance program for low-income Americans, over to the states.

What would this all mean in practice? It’s impossible to say with any precision, at least without more details about the dollar amounts involved.

Still, the outlines of Bush plan look a lot like like some other plans now in circulation on the right, like the so-called 2017 Project Plan and a proposal from Rep. Tom Price (R-Ga.). These plans envision less government spending and regulation, but would likely result in some combination of fewer people with insurance and less financial protection for people who have coverage. Experts contacted by The Huffington Post said they expected Bush's plan, if enacted, would play out in a similar way.

Here’s why. The basic concept of the Affordable Care Act, like all universal health care plans, is to set some basic standards for private insurance, then provide financial assistance to people who cannot afford such policies on their own. Those standards include requirements that all plans include “essential benefits” -- in other words, not just hospitalization, but also services like rehabilitation, mental health, prescription drugs, and maternity care.

The Affordable Care Act also prohibits insurers from denying coverage or charging higher premiums for people with pre-existing conditions. In addition, it sets limits on out-of-pocket spending -- with even tighter limits for people with lower incomes, on the theory that the working poor simply don’t have the money to absorb high out-of-pocket costs.

These regulations are why the insurance plans that people buy through the Affordable Care Act’s exchanges can be so much more expensive than the plans many people bought before the law existed -- and why, under the Affordable Care Act, the government must spend so much subsidizing coverage for people who can’t pay those higher premiums.

The Bush plan would weaken those standards on insurance: People buying coverage would have more freedom to buy less-generous policies that cover only catastrophic costs. And the tax credits that Bush would provide, by design, guarantee access only to these catastrophic policies.

That’s cheaper than subsidizing the “silver” plans that the Affordable Care Act treats as its standard -- a result conservatives would certainly cheer. But without ACA levels of assistance, poorer people who want more comprehensive coverage probably wouldn’t have the money to buy it.  Once they got sick, they’d be stuck with more punishing out-of-pocket expenses.  And because these are people with lower incomes, they’d have less money to cover those costs.

“Repealing Obamacare and replacing it with fixed tax credits would hurt low-income folks who finally just got decent insurance,” Len Nichols , a former Clinton administration official and widely respected health economist at George Mason University, told The Huffington Post.

Bush’s designs on Medicaid would likely have a similar effect. While the campaign has not specified how much money the states would get under Bush’s scheme, conservative plans to hand control over to the states generally call for less spending on the program. Medicaid is already under-funded. If states had even less money with which to manage it, they’d almost surely have to restrict eligibility or cover fewer services -- either of which would mean less financial protection, in this case for the very poor. (This briefing by the Center on Budget and Policy Priorities explains in more detail.)

One more key footnote to the Bush plan is its protection for people with pre-existing conditions, which is different from the guarantee in the Affordable Care Act. The Bush plan calls for guaranteeing access, but only for people with "continuous" coverage. That means people whose insurance has lapsed -- say, because they lost a job and couldn't afford premiums for a few months -- could be subject to denial because of their current medical problems.

The Bush plan has some noteworthy and interesting wrinkles, befitting a politician who has promoted himself as the most serious policy candidate in the GOP race. (His plan may not have much detail, but it's considerably more substantive than what his rivals have produced.) Among other things, Bush calls for establishing targets and incentives for states to improve medical outcomes.

In addition, Bush calls for replacing the Affordable Care Act’s “Cadillac tax” with a cap on the tax exclusion for employer insurance. It’s a more direct and efficient way of accomplishing the same goal as the Cadillac tax, although -- as Phil Klein of the Washington Examiner has noted -- Bush would design the cap in such a way that it would affect fewer plans, at least initially.

A debate over the Cadillac tax seems likely in the next Congress, with calls for its repeal strong on both sides of the partisan aisle. Bush’s proposal may indicate one way that Republicans, and maybe even some Democrats, would prefer to reform it.

But the most important part of the Bush plan is its changes to the coverage scheme -- and it’s likely that more Republican candidates will call for similar changes before the campaign is over.

“There seems to be an emerging consensus among Republican candidates for how to approach health care, beyond repealing Obamacare,” Larry Levitt, senior vice president at the Henry J. Kaiser Family Foundation, said on Monday night. “It centers around more limited protections for people with pre-existing conditions, health insurance tax subsidies that don't vary with income, scaling back the tax subsidy for employer-based health benefits, and capping Medicaid. It means less regulation, and also less direct help for lower income people with their health needs.”

Sam Stein contributed reporting.

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