"Paul Ryan’s Replacement For The Affordable Care Act: Health Vouchers For Everyone"
Rep. Paul Ryan (R-WY) is finally offering a Republican replacement for the Affordable Care Act. But don’t expect any new ideas — the chairman of the powerful House Budget Committee has dusted off his “Roadmap For America’s Future” proposal and is now officially offering it up a viable alternative to the ACA. The plan doubles down on Ryan’s effort to end the traditional Medicare program for future retirees and block grants Medicaid to the states, but then goes even further, re-stating Ryan’s long-term goal of ending the existing employer-based health care system and pushing individuals and families into the unregulated individual health insurance market with a voucher in hand.
With the Affordable Care Act fully repealed, Ryan would eliminate the existing subsidy for employer-sponsored insurance and use those dollars to provide families and individuals with tax credits to purchase coverage on their own. Those denied insurance because of a pre-existing conditions can enroll in a state-based high risk pools full of sick people. Americans currently under 55 years of age will move into a private plan outside of the Medicare system and states will receive less federal funds for their Medicaid program through a “block” of dollars that does not keep up with costs.
What could go wrong? Well, if you’ve been following the health care debate for the last decade, you know that the GOP’s boilerplate approach to health care policy has several very significant flaws:
1) Ryan’s “premium support” proposal for Medicare wouldn’t do anything to actually lower the nation’s health care spending. Rather, it reduces government expenditures by asking future enrollees to pay more for their health care coverage. Future seniors would be taken out of the traditional Medicare program and given a “premium support” to purchase more expensive private coverage. As the Congressional Budget Office (CBO) concluded in its analysis of the Ryan proposal, “a typical beneficiary would spend more for health care…[because] private plans would cost more than traditional Medicare.” ”This would more than double out-of-pocket health-care spending by a typical senior to $12,500 per year.”
2) A recent Kaiser Family Foundation report has pointed out that converting the existing matching rate formula into a block grant would give states less money that they would have otherwise received and force local governments to cut eligibility to the program. Kaiser examined different scenarios for state responses to reduced federal Medicaid spending and estimated 31 to 44 million Americans could lose their health insurance coverage. In fact, Republican governors recently admitted that the solution would not work for all states.
3) Ryan argued that reforming the tax code would promote individual ownership of health insurance and offer individuals more choice. He thinks this would create the best of both worlds by allowing certain individuals to leave their employer-sponsored health insurance plans and use tax credits to find coverage on their own. But this would only entice young healthy workers to buy cheaper but less substantive insurance in the individual insurance plan market place, increasing costs for sicker workers and forcing some to opt out entirely. Among those who would lose their health care are 56 million Americans with pre-existing chronic health conditions. The credits would also fail to cover the cost of comprehensive coverage.
4) Ryan advocated for allowing individuals to purchase insurance across state lines. This means that insurers would be able to circumvent consumer protections in certain states and sell bare-bone subprime policies to the healthiest (and most profitable) beneficiaries. Companies would have little incentive to do business in states that require coverage for such things as cancer screenings or have guaranteed issue protections and sell plans across the country that deny coverage altogether to high-cost cases. The Affordable Care Act includes a similar — but far better regulated — provision that allows states to form compacts in which they can establish their own regulations.
5 ) Ryan claimed that reforming the medical liability is a “no brainer.” But the current health care law already includes similar demonstration projects, even if the Congressional Budget Office has concluded that malpractice reforms could at most save $54 billion over 10 years.
The major problem here is Ryan’s ideology and underlining philosophy. It’s what economist Jacob Hacker calls The Great Risk Shift. Republicans are slowly dismantling the New-Deal era institutions that spread economic risks “across rich, and poor, healthy and sick, able-bodied and disabled, young and old” and shifting all of the economic costs and risks onto individuals (or as Ryan calls it, freeing Americans from the “relentless expansion of government and a new culture of dependence“).
In the wake of the Great Depression, “political and business leaders put in place new institutions designed to spread broadly the burden of key economic risks, including the risk of poverty in retirement, the risk of unemployment and disability.” “These public and private institutions did not let the individuals off the hook they required contributions and work and proof of eligibility” and they provided all Americans with a guarantee that if they paid into the system, they would later benefit from it.
But under Ryan’s alternative, the economic costs and risks of insurance are spread across a party of one — the individual. If that individual falls sick or a family loses its breadwinner, she or he is only empowered to lose. As Hacker explains, “The next frontier in the Great Risk Shift is the transformation of existing programs — Medicare and Social Security chief among them — from guaranteed benefits defined by law to individualized private accounts that leave workers and families shouldering more and more of the risks that these programs once covered.”