The Republican Alternative To Obamacare

Avik Roy summarizes key parts of the Senate plan unveiled yesterday:

While the plan would repeal Obamacare, it would preserve some of the law’s most popular features, such as its ban on lifetime limits on insurer payouts, and its requirement that insurers cover adult children younger than 27. It would replace Obamacare’s premium hike on young people, known as age-based community rating, with a more traditional 5:1 rating band.

It wouldn’t maintain Obamacare’s individual mandate, nor its requirement that insurers offer coverage to everyone regardless of pre-existing health conditions. Instead, the plan would require insurers to make offers to everyone who has maintained “continuous coverage,” while aiding states in restoring the high-risk pools that served those who insurers won’t otherwise cover. Subsidy-eligible individuals who failed to sign up for a plan would be auto-enrolled in one priced at the same level as the subsidy for which they qualified.

Carpenter notes one major drawback:

[T]hose with pre-existing conditions that fail to maintain continuous coverage at any time could be denied coverage. Nearly 90 million Americans have a pre-existing condition. That’s quite the crack to fall through.

Beutler calls the proposal a “mess”:

If Republicans had offered this plan as an opening bid in 2009, they might have found Democrats willing to make a counteroffer and negotiate toward some kind of compromise — or they might have knocked the whole legislative process off the rails. But in 2014, a plan that devolves crucial aspects of Obamacare without any inducement for Democrats is a joke.

Yglesias thinks “key thing about this is that it doesn’t envision radically remaking the health care system along free market lines”:

Relatively to the status quo that existed in 2009, it would constitute modestly remaking the health care system along liberal lines. Most of all, as a political document it reflects an appreciation of the overwhelming political power of the status quo. You can’t kick those 25-year-olds off their parents’ insurance plan. You can’t deny the currently insured the peace-of-mind that comes from knowing that getting sick won’t make them uninsurable. You can’t change tax policy in a way that’s too disruptive. And this plan isn’t going to pass in 2014. It’s not going to pass in 2015. And it’s not going to pass in 2016. By 2017, Medicaid expansion and subsidized exchange plans will be the new status quo. Are the Coburns, Burrs, and Hatches of 2017 really going to be willing to blow that up?

Sarah Kliff’s related thoughts:

Obamacare has become the starting point for negotiations. This wasn’t really true a few years ago, or even a few months ago, before the health-care law’s insurance expansion started. It’s interesting that this proposal takes some of the contours of Obamacare and works around them, such as ending pre-existing conditions and continuing dependent coverage up to age 26. The health-care law’s $700 million in Medicare cuts stick around, too. Even though it’s a replacement plan, it also acknowledges that Obamacare isn’t totally going to disappear.

Yuval Levin talks up the plan:

It can … be called a very encouraging sign that congressional Republicans know that they will need a serious Obamacare replacement if they are to persuade the public that Obamacare must be repealed. It’s especially encouraging that Orrin Hatch – who is the ranking Republican on the Senate Finance Committee (the key committee with oversight for federal health-financing policy) and would likely become chairman of that committee if Republicans took over the Senate next year – is among the sponsors of this proposal. The ideas here are also very much in line with those laid out over the years by Paul Ryan, who is likely to become chairman next year of the equivalent House committee, the Ways and Means Committee.

This proposal is just a step, of course – an imperfect and an incomplete step, like any legislative proposal. But it is a major and important step, and a very encouraging one.

Philip Klein’s bottom line:

Ultimately, the new Coburn-Burr-Hatch plan would not usher in a free market for health insurance in the United States, which would require fully ending the distortion of the tax code and removing far more regulations. What it does do is offer individuals more freedom than now exists under Obamacare.