GOP’s ‘Pledge’ Health Proposals Are Conservative Twists On Existing Law

I agree with Avik Roy that there are substantial differences between the Affordable Care Act and the GOP health care ‘replacers’ in the ‘Pledge To America’ but in almost all instances the former is a better deal for consumers than the latter.

My comparison table from yesterday may have obscured those differences but it was not meant to suggest that Republicans would replace the law with identical proposals of existing provisions and regulations. Rather, it was to emphasize that the law is, in fact, a child of bipartisan policy compromise and includes more moderate versions of common health care solutions. Undoubtedly, the ideas in the Pledge are in many instances slightly different and more conservative than those contained in the law. Consider:

1. Insurance across state lines:

ACA: Insurers can sell policies within the confines of state compacts. The states will designate one primary state whose laws shall govern the issuer.

PLEDGE. The document is short on specifics, but if the GOP’s past proposals are any indicator, then Republicans would allow insurers to designate a primary state — they will presumably chose one with the skimpiest regulations — and market policies to other states without adhering “to all of the consumer protection laws or restrictions on rate changes of the state.” The House Republican alternative from 2009 also expanded the definition of state to allow insurers to sell policies from the Virgin Islands, Guam, American Samoa and the Northern Marianas.

2. High-risk insurance pools:

ACA: Here I agree with Roy. The law’s “high-risk pools are seriously underfunded and have essentially no chance of succeeding.” The high premiums are preventing more sick people from enrolling. Subsidies will likely be needed for this to become a viable coverage option.

PLEDGE: Unfortunately, the GOP alternative is really not any better. Again, if you turn to the House alternative, Republicans wanted to fund the pools to the tune of $15 billion over 10 years — that’s still not nearly enough. And, they capped off premiums at no higher than 150% of (state) average; ACA sets them at no higher than the average person of that age would pay for insurance in the private market. Still, covering large groups of sick people is expensive, inefficient, and probably bad policy.

3. Pre-existing conditions:

ACA: Insurers cannot turn away individuals with pre-existing conditions, a policy that should keep costs in check if applied in conjunction with an individual mandate and other system efficiencies.

PLEDGE: Insurers would have to waive the pre-existing condition exclusion only for those individuals who have had prior coverage. Everyone else would go into the underfunded, poorly functioning, high-risk insurance pool.

4. State innovation:

ACA: States can receive waives from certain requirements if they can cover the uninsured and lower health costs in a more innovative manner.

PLEDGE: It’s unclear what Republicans would do to spur state innovation. In the past they’ve offered bonuses for states that lower premiums, number of uninsured. The House Republican alternative established state innovation program grants to reward states for lowering the cost of their premiums. Included bonus for reducing the number of uninsured.

5. Abortion:

ACA: Insurers that choose to offer abortion services in the exchanges must segregate their funds to ensure that public dollars don’t go towards non-Hyde restricted abortions. The high risk insurance pools and the community health center dollars are also under similar restrictions. Other federal dollars are not.

PLEDGE: Republicans want to codify Hyde restrictions — only abortions in cases of incest, rape, life of mother — in all federal funding.

The larger point here is that Republicans don’t really have too many new or revolutionary health care ideas; just more conservative twists on current law. If they really wanted to get creative they would have proposed something to decouple insurance from the employer system, innovative individual market reforms and real cost controls. But that would have been a little harder to message.