Republicans Run Away From Their Own Ideas With Repeal Of Exchanges

romney_geer_natdef1june09Today, just days after voting for Rep. Paul Ryan’s (R-WI) plan to establish a new federal exchange for future Medicare beneficiaries and favorably comparing that structure to the exchanges found in the Affordable Care Act, Republicans in the House are expected to approve a bill that would eliminate federal planning grants to help states establish their own exchanges. Under the Affordable Care Act, states would still be required to build the new market places by 2014 and would likely have to rely on the federal government to design and maintain the exchanges.

But should the bill become law, it wouldn’t only increase federal control over the state-based exchanges — it would also put the GOP on record as opposing a concept initially promoted by the conservative Heritage Foundation. As PolitiFact has pointed out, the organization touted the idea as part of Mitt Romney’s health reforms in Massachusetts:

[T]here’s little doubt that Heritage has been a consistent and eager promoter of the exchange idea, especially during the effort to design a new health care system for Massachusetts. That effort concluded with the Democratic legislature joining with the Republican governor, Romney, to implement a system that includes a health insurance exchange.

On numerous occasions, Heritage scholars wrote approvingly of the exchange system in Massachusetts, known as the Connector. In a paper about the Massachusetts plan published on April 11, 2006, Edmund Haislmaier, a Heritage fellow in health care policy, wrote of the “truly significant and transformative health system changes that the legislation would set in motion.”

Specifically, Haislmaier wrote that “this concept of organizing a state’s insurance markets around a central clearinghouse represents a dramatic departure from recent state health insurance reform proposals. States have spent the past 15 years trying to expand health care coverage to small-business employees, with virtually no positive results. The Massachusetts legislation represents a bipartisan commitment to move away from the policies that have largely failed to make progress in covering the uninsured for the past 15 years.”

Indeed, Congressional Republicans have consistently touted exchanges as a means of allowing small businesses to pool risk and lower health care costs. For instance, Sen. Olympia Snowe (R-ME) has for years introduced the Small Business Health Options Program Act (also known as the “SHOP Act”) to establish an exchange for small businesses to pool and purchase affordable insurance.” The bill was also co-sponsored by Sen. Susan Collins (R-ME). The GOP continued to support the broad framework of health reform — including the central concept of the exchanges — throughout 2009. In September 2009, for instance, Rep. Eric Cantor (R-VA) told a town hall meeting that “Republicans and Democrats agree on 80 percent of fixing the nation’s healthcare system.” Rep. Charles Boustany (R-LA), who delivered the Republican response to the President’s congressional address in September, also said, “I would venture to say that we agree on about 80% of the issues right now. It’s just a matter of hashing out those few areas where we disagree, but there’s really not been that kind of real discussion, and it needs to happen.”

Those “few areas” may very well have been the details of how the exchanges should be designed, with the GOP arguing that the current law gives the federal government too much control over the regulations in the state-based exchanges. But their legislation would make it even more so. A Congressional Budget Office (CBO) analysis of the legislation has concluded that repealing the federal grants would save the federal government $14 billion over 10 years. Without the federal grants, fewer states would establish the exchanges and the government would consequently spend less subsidizing their coverage. “Under H.R. 1213, CBO assumes that some states will move forward without federal funding to establish exchanges, but that the federal government will be required to take responsibility for setting up exchanges in more states than is expected under current law,” the budget office concluded.