The failure of the House Republican proposal to repeal and replace Obamacare has turned the attention of Republican members of the Senate to devising an alternative that captures their somewhat more moderate preferences but still sticks to Republican promises to repeal the objectionable parts of the ACA. The most well developed version is the Patient Freedom Act (PFA), introduced by Senators Cassidy and Collins.
While there is, in my opinion, much merit in the core idea of the bill—to turn back to the states the difficult job of finding a plan to cover many uninsured people at a cost to insurance buyers and taxpayers that will not blow their respective budgets—the problem as usual is the details. And the problem is that, despite persuasive criticism that the ACA was weighted down with far too many unneeded, controversial, or partisan regulations, the PFA takes much the same strategy, with prespecified insurance designs and rules for what qualifies for subsidies.
Those rules appear themselves to be restrictive in the current broad draft and are certain to multiply as details are spelled out and rules are written for implementation. Moreover, and perhaps more fundamentally un-Republican, the bill clearly tries to push individual Americans toward a particular kind of health plan, rather than letting them choose the plan design they find most attractive and therefore are most likely to buy.
The bill has three parts. First, as a major gesture toward compromise, states that have implemented Obamacare exchanges and Medicaid expansion can keep what they have and get the same subsidies. Crazy California can continue to go its own way if it wants to.
Second, a state could chose an option in which the average value of the credits and subsidies that would have been sent to a state under Obamacare can still flow to that state if it enacts a health plan with health savings accounts and high deductible health insurance—the longtime Republican favorite. States would be expected to put any subsidies in a (Roth) savings account (at equal value regardless of income; millionaires and billionaires would qualify) which is then to be twinned with a high deductible health plan offered at lower (than Obamacare) but still community rated premiums.
That is a fair amount of regulation right there, but there is more. People are to be auto enrolled in this combination; they can opt out to be uninsured but must choose to do so actively. That is better, some might think, than a penalty if they remain uninsured as in the ACA, but still pushes them in a direction they may dislike.
Finally, states could opt out of either Part 1 or Part 2 and instead offer some other kind of health insurance plan. However, then they would get zero subsidies from the federal government; they would be on their own and have to go it alone.
That last provision surely pushes states around by using the weapon of withholding federal support, and Part 2 pushes individual insureds around by requiring at least a particular kind of minimum coverage (though consumers can opt out and buy more generous coverage).
The most obvious question is—why not make things neutral and let all states get the same subsidies as long as they come up with a plan that offers real insurance and has a chance of reducing the number of uninsured? One could even condition continuation of subsidies on success in reducing the number of uninsured or achieving some measure of health gain (reduction in mortality). One could surely build in monitoring to prevent egregious abuse while still allowing states and their citizens to make the free choices they want.
Adding regulation for a different kind of coverage “for their own good” is not, I suspect, what Republican voters thought that “repeal and replace” was going to mean.