Republicans want to repeal and replace Obamacare. If they do, what will we get?
The details are still quite sketchy. Republicans have yet to actually draft a bill or even present a full proposal. However, they have outlined a few key concepts.
To make health coverage easier to obtain, they would encourage competition among private insurance companies. To that end, they would let people buy policies across state lines, something that is not presently allowed.
To encourage small businesses to offer coverage to their employees, Republicans would let them band together into purchasing groups. This, it is hoped, would give them more bargaining leverage with insurers.
They would expand the use of high-deductible policies that leave the patient responsible for the first several thousand dollars of medical expenses each year. These would be coupled with tax-favored savings accounts to cover the gap.
What about those who lack access to employer coverage and have preexisting conditions that make purchasing individual policies difficult or impossible? Republicans would let them join high-risk pools based in each state. And those who are young and don’t yet have a job with coverage could stay on their parents’ policies until age 26.
Does this sound vaguely familiar? It should. Each of these concepts is already part of Obamacare.
The insurance exchanges that become operational in 2014 encourage competition among private companies, and some of them may sell policies across state lines. They will also enable small businesses to band to together to bargain for better deals. And the exchanges will offer high-deductible policies to people up to age 30.
Obamacare gave us high-risk pools that are already operating in several states. And letting children stay on their parents’ coverage until age 26 is one of Obamacare’s hallmark features that went into effect last year.
True, Obamacare contains many more provisions, including numerous rules and restrictions. Among them, it forces insurers to cover people with preexisting conditions, offers subsidies to small businesses and those with low incomes, and expands Medicaid. It also includes various consumer protections to prevent market abuses along with mechanisms to control costs.
And most significantly, it includes a mandate requiring that everyone have coverage. The industry sees this as essential to making the private market work.
But it is an actual law. It’s easy to leave out controversial details in a set of general concepts. Could the Republican plan produce meaningful market reform without these kinds of prescriptive regulations? Who knows? They have yet to say anything about how their concepts would actually be implemented.
The Republican plan does include some additional elements that Obamacare lacks. To reduce spending, it would limit recoveries in malpractice suits. The nonpartisan Congressional Budget Office estimates that this would cut health care costs by about one-half of one percent. It would also restrict federal funding for abortions, but this would have no economic effect.
CBO predicts that Obamacare’s full package of reforms will save the government about twice as much - $119 billion over the next ten years.
When, and if, Republicans put forward a detailed health reform plan, we may learn whether they can increase access to coverage and cut costs without the complexity of Obamacare. Until then, what they have given us is a stripped down version of some familiar themes. Perhaps we should call it Obamacare lite.
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