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Tuesday, December 9, 2014

When Obamacare sucks....

Obamacare flies in the face of many principles conservatives hold dear, including individual consumer choice and a belief that “massive government bureaucracy” and “efficiency” don’t belong in the same sentence. Despite the spin that Obamacare was about preserving the private health insurance market, the incredible number of mandates it imposes and its large expansion of state-funded care make this a difficult line of argument to sustain.

All along, the law’s defenders repeatedly asked, where is the Republican critics’ plan? It was somewhat disingenuous – several solid proposals had been put forth – but none had passed in the Republican-led House or the Democrat-led Senate. That was partly practical, as President Obama was sure to veto any alternative to Obamacare, but it did seem that House Republicans had trouble coalescing around a plan.

There were solid proposals out there, though, including the detailed Patient CARE Act from Republican senators, as well as solid ideas from Reps. Paul Ryan, Tom Price, and others.

Another alternative plan worth examining comes from Ed Gillespie. If you don’t know the name, Gillespie is the Virginia Senate candidate who came tantalizingly close to defeating Sen. Mark Warner earlier this month, despite the fact that Warner was expected to easily coast to re-election.

Gillespie’s plan is based on ideas from the 2017 Project, and he thinks it played a big role in his razor-thin election. “In a purple state like Virginia, I could not have gotten so close to defeating Mark R. Warner, a popular incumbent, by talking only about ‘repeal,’” Gillespie wrote. “My plan…enabled me to rebut the charge that all I wanted to do was go back to things as they were before.”

As Gillespie notes, the stakes are high because many have suspected since its inception that Obamacare was designed to, in some sense, fail. It was “cleverly designed to lead us over time to a single-payer system.”

This will become clearer when the employer mandate provisions kick in next year, with their incentives for companies to dump workers from their employer plans into government-run exchanges. As the exchanges swell and become more costly to taxpayers, we’ll be told that a government monopoly would be more cost-effective.

Republicans, Gillespie argues, need a plan that confronts the very challenges that led to Obamacare’s enactment: “rising costs, too many uninsured people and a lack of protection for patients with pre-existing conditions.”

The crux of Gillespie’s plan is worth closer examination by Congressional leaders:
  • Fairness in tax credits
    Currently, health benefits received from an employer are not taxed as part of an employee’s overall compensation. Some advocate for eliminating this tax credit, but Gillespie’s plan takes the opposite tack, instead extending tax credits to include the millions of Americans who purchase their own health insurance. Gillespie’s plan would end the unfairness of the current system, which essentially punishes citizens who do not receive employer-based coverage.
  • Those tax credits go directly toward purchasing private coverage
    “The tax credit would be $1,200 per year for those under 35 years of age, $2,100 for those 35 to 49, and $3,000 for those 50 or older, plus $900 per child. For a family of four headed by two 40-year-old parents, the tax credit would be like having $6,000 in cash to spend on health insurance. If the family found a plan they liked for less, they could put the difference in a health savings account to help cover out-of-pocket expenses.”
  • Grace periods for those with pre-existing conditions
    With built-in grace periods for newborns, young adults, and those who lose their employer-based coverage, Gillespie’s plan would help protect those with pre-existing conditions from having to pay much higher rates.
  • High-risk pools
    Under this plan, those who face unaffordable rates because of pre-existing conditions could buy into high-risk pools that will guarantee their coverage. No one wants to see fellow Americans rejected for coverage because of pre-existing health issues.
Gillespie’s proposal is intriguing. It is a less-government, expanded-choice conservative alternative to Obamacare. It may be, with two years remaining in President Obama’s term, that nothing major about Obamacare will be changing anytime soon. Gillespie’s plan and other alternatives, though, will give Republican policy leaders a lot to chew on – and something for 2016 presidential candidates of both parties to debate.

- Rob McKenna

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