At last night’s CNN presidential debate in Jacksonville, Florida, the GOP candidates told an unemployed woman in need of health insurance that they would repeal the health reform law that could help her find coverage and giver her a tax deduction to go out and find her own insurance.
The woman — Lynn Frazier — said she found herself “unemployed for the first time in 10 years and unable to afford health benefits.” Under the Affordable Care Act, Frazier may qualify for temporary insurance in the state’s high-risk pool, which already provides coverage for 3,285 Floridians who can’t find affordable coverage elsewhere. In two years, she’ll be able to pick out a health policy through the state’s Exchange. All private insurers will offer a comprehensive basic set of benefits and allow consumers like Frazier to compare and contrast different plans to find the coverage that works best for them and their family. Insurers won’t be able to deny insurance based on past illness or rescind coverage unexpectedly, as they often do in today’s health market, and Frazier will pay a “community” rate and may even qualify for tax credits to help her afford her premiums and out of pocket cost-sharing expenses.
The Republican candidates pledged to undo these benefits and instead encouraged her to find coverage “as an individual” — on her own — with the help of a government tax deduction:
— RON PAUL: And you should have an opportunity — medical care insurance should be given to you as an individual, so if you’re employed or not employed, you have — you just take care of that and you keep it up.
— NEWT GINGRICH: She ought to get the same tax break whether she buys personally or whether she buys through a economy. She should also be able to buy into an association so that she’s buying with lots of other people so it’s not single insurance, which is the most expensive kind.
— MITT ROMNEY: What we should do is allow individuals to own their own insurance and have the same tax treatment as companies get. You do that and people like this young woman would be able to own her insurance. The rates would be substantial lower for her buying it individually than if she had to buy it individually today.
— RICK SANTORUM: All three of these folks sound great and I agree with them. I would just add that health savings account, which I introduced 20 years ago with John Kasich, is really the fundamental reform of getting consumers back involved in the health care system.
Watch the exchange:
In reality, sending off Americans to face health care insurers on their own without first reforming the individual health care market — so that companies can no longer deny coverage due to pre-existing conditions, rescind insurance, or charge sicker and older people substantially more — is an inadequate solution that will do little to lower the number of uninsured or reduce health care costs.
Since insurers are hoping to attract the most profitable beneficiaries, individual plans offer “coverage so riddled with loopholes, limits, exclusions, and gotchas that it won’t come close to covering their expenses if they fall seriously ill.” As a Consumer Reports investigation concluded, individual insurance policies are “more costly than the equivalent job-based coverage, and for those in less-than-perfect health, unaffordable at best and unavailable at worst.” The lack of effective consumer protections in most states also allows insurers to trick consumers by selling plans with “affordable” premiums “whose skimpy coverage can leave people who get very sick with the added burden of ruinous medical debt.”
Thus, if an individual falls ill under the GOP’s proposal, the cost of the medical episode and the inadequate insurance will outweigh any beneficial tax treatment and deplete any health savings account they may have.