Gingrich’s Offer Of ‘Charity Care’ Falls Short

Our guest blogger is Emily Oshima, a Research Associate/Policy Analyst with the Health Policy team at American Progress.

Although Newt Gingrich once publicly championed the individual health insurance mandate, he – and other Republicans – now staunchly oppose the idea. During a town hall in Davenport, Iowa on Monday, the former House Speaker argued that while the mandate can prevent healthy people from free riding the health care system, the provision forces “politicians” to “define health care.” Instead, he endorsed economist John Goodman’s “patient power” solution, which uses tax credits to encourage healthier and younger people to purchase insurance before they become sick and shift the costs of their care throughout the health care system. Under Goodman’s proposal, Americans who go uninsured would store away the credit they would have received for purchasing coverage to later spend on “charity care” -– essentially the high risk pools Republicans proposed as an alternative to the Affordable Care Act.

But Gingrich once supported the mandate for a reason. The mandate is the only mechanism that will move America towards universal coverage and ensure that all people have access to quality care. The Congressional Budget Office (CBO) estimates that eliminating the mandate would reduce coverage by 16 million people. Even generous premium credits –- which likely go beyond what’s included in the Goodman plan — would cover only 40 to 50 percent of the uninsured.

The high-risk pools are no more effective. Since covering large groups of sick people is expensive, the CBO found that Republican high risk pools would cover fewer than 3 million patients, while significantly driving up premiums for all by redistributing the high health care costs of some users more broadly. The Affordable Care Act’s temporary pools have encountered similar cost problems. Further, high risk pools require government funding — given recent attempts to slash Medicaid and states’ tight budgets, can we really believe that Gingrich is committed to funding care for “charity”?

What’s more, there are numerous flaws with the structure of his proposed tax credits: They are inadequate –- keeping insurance prohibitively expensive for some –- and would fail to grow with rising costs. Without the regulatory protections of the ACA, Goodman’s plan would also throw millions of people into “the Wild West” of the individual health insurance market, where millions of Americans will be denied or priced out of coverage altogether.