CREDIT: Charles Dharapak / AP
On Monday, a trio Republican senators unveiled an alternative to Obamacare eerily similar to the one that former presidential candidate Mitt Romney proposed in 2012. The plan boils down to a rehash of boilerplate conservative ideas for “market-oriented” and “consumer-driven” health care reform — code words that really mean deregulating the insurance industry and forcing consumers to shoulder a larger burden of their health care costs.
Here are the five most troubling aspects about the new proposal from Sens. Tom Coburn (OK), Orrin Hatch (UT), and Richard Burr (NC), dubbed the Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act:
1. It would kick millions of Americans off of their health plans.
Right off the bat, the Patient CARE Act would repeal Obamacare in its entirety, meaning that the three million Americans who have already enrolled in new plans through the law’s state and federal marketplaces and the millions more deemed newly eligible for Medicaid coverage in states that expanded the program would lose their health coverage.
But that’s not the only part of the bill that would take away Americans’ health plans. The CARE Act would also make big changes to the way that Medicaid is funded by imposing a so-called “per capita cap” on it. This cap resembles a block grant and it would push states to cover a highly selective group of people through Medicaid, namely pregnant women, women with children, and the disabled, forcing most of the working poor to pursue more expensive private insurance plans.
2. It dismantles many of Obamacare’s core consumer protections.
Chances are, you’ve benefited from at least one of Obamacare’s consumer protections, like a free checkup, preventive screening for HIV, a mammogram, or no-cost birth control. Millions more will benefit in the coming years, thanks to the law’s requirement that individual policies sold through the marketplaces cover a broad range of “essential health benefits” like maternity care, mental health care, and prescription drug coverage.
Say goodbye to all that under the Patient CARE Act. The bill places no such requirements on insurance companies; in fact, it dismantles Obamacare’s prohibition on gender rating, meaning that women will go back to an era where they are charged $1 billion more for their health care on a national level than men.
3. It does almost nothing for Americans with pre-existing conditions.
Some estimates have shown that as many as half of all Americans have some sort of pre-existing condition. If you’re one of them, good luck getting insurance under the Patient CARE Act.
Under the bill, insurers can still turn away people with pre-existing conditions. The only exception is if you have “continuous coverage,” meaning you’re either already insured or have been able to maintain some form of insurance despite losing the coverage you had through your employer. The thinking behind this idea — which was also proposed by Romney in 2012 — is that insurers will be able to offer cheaper policies at the expense of denying health care to sick people. And while the plan does preserve Obamacare’s ban on lifetime limits on medical benefits, it allows insurers to set annual caps on care.
Coburn et. al. also allude to federal funding for so-called “high-risk pools” for the sickest consumers. But these are plagued with inefficiencies, long waiting periods, and are often prohibitively expensive for both consumers and the government. There’s recent real-world evidence to support those notions — Obamacare’s own temporary high-risk pool program ran out of money despite enrolling far fewer people than originally expected, forcing the government to stop accepting new enrollees.
4. It would make millions pay more for their employer coverage.
The Patient CARE Act would also amount to a tax hike for the more than 150 million Americans who get coverage through their employer. In an effort to encourage Americans to choose skimpier health plans, the bill sets a cap on the federal tax exclusion for employees’ health care.
Currently, workers’ insurance premiums are paid for with pre-tax dollars; under the Coburn-Hatch-Burr proposal, the exclusion would be capped at 65 percent, meaning everyone with an employer plan would have to pay taxes on 35 percent of their premium. If you have a more expensive health plan, your taxes would go up correspondingly. By contrast, Obamacare only imposes a tax on the priciest of health policies — so-called “Cadillac” plans.
5. It provides fewer subsidies to help Americans buy health care.
Coburn-Hatch-Burr does preserve Obamacare’s insurance subsidies in theory. But in practice, the bill pushes more costs onto consumers.
In lieu of Obamacare’s sliding scale insurance subsidies for people between the poverty level and four times the poverty level, the Patient CARE Act provides a flat subsidy that increases with age and is only available to people making up to three times the poverty level. That might work out for someone who is relatively healthy; but if you’re sick and poor, the type of coverage you need could easily be out of reach — particularly since insurers aren’t subject to the benchmark benefits standards of Obamacare.