Scott Walker lays out his Obamacare replacement

Scott Walker

While Donald Trump waxes poetic about single-payer health care in Scotland, we have (to my knowledge) the first detailed, conservative reform plan from a GOP candidate. And to those in Georgia who have followed this issue closely, it will sound a good bit like what Rep. Tom Price has proposed.

Scott Walker released his health-reform plan on Tuesday, titled “The Day One Patient Freedom Plan.” It is based on five principles outlined at the outset:

1. Repeal ObamaCare in its entirety.
2. Ensure affordable and accessible health insurance for everyone.
3. Make health care more efficient, effective and accountable by empowering the states.
4. Increase quality and choice through innovation.
5. Provide financial stability for families and taxpayers.

Those are the philosophical talking points. How would his plan try to achieve them? Here are some of the key points.

Age-Based Tax Credits and HSAs

If you have health insurance through your employer today, it is subsidized through preferential tax treatment. Walker’s plan would create tax credits for those who aren’t insured that way. These credits would be refundable, meaning a person would get them even if he doesn’t have to pay federal income taxes, and they would be based on age rather than income (a feature of Price’s plan). There are four age brackets, with the credits offered ranging from $900 for those ages 0-17 to $3,000 for those ages 50-64. The idea, according to the plan’s text, is to “level the playing field between those who purchase coverage through an employer and those who purchase it on the open market.”

The goal would be a health-insurance market that, freed from Obamacare’s regulations, would offer more options and competition. As Yuval Levin, one of the right’s best health-care thinkers, explains at National Review:

“This would make at least catastrophic health coverage available to essentially anyone with no premium cost beyond the credit (as insurers would have a strong incentive to offer plans with premiums equal to the credit and out-of-pocket costs adjusted accordingly), and in the wake of the repeal of Obamacare’s federal insurance regulations such plans could come to look like real insurance for those who wanted no more than catastrophic coverage. Others could of course purchase more comprehensive plans, paying for the added coverage as before. This would in essence put a floor of catastrophic coverage, rather than no coverage, beneath the health insurance system and then allow that system to function as a robust, competitive market.”

There would seem to be an additional incentive for consumers to seek coverage (and thus for insurers to compete to offer it) with even lower premiums: They could put any leftover money into a Health Savings Account to use for out-of-pocket expenses. Anyone who opened an HSA would, under Walker’s plan, get a $1,000 tax credit at the start. The plan also raises the annual limits for tax-free HSA contributions (as does Price’s plan).

Market Reforms

The Walker plan, like the Price plan, would allow Americans to shop for insurance across state lines. Combined with the removal of Obamacare’s regulations of insurance products and an additional change allowing more entities (such as trade associations and religious groups) to form insurance pools, that should spark more competition in price and offerings.

For those with pre-existing conditions, the Walker plan would ensure that those who have maintained coverage can’t be penalized for switching employers or insurance carriers:

“Provided individuals maintain continuous, creditable coverage, no one would see their premiums jump because of a health issue or be shut out of access to affordable health insurance because of a new diagnosis or a pre-existing medical condition. Newborns, as well as young adults leaving their parents’ insurance plans and buying their own, would have these same protections. Unlike the ObamaCare approach, my plan would protect those with pre-existing conditions without using costly mandates. By relying on incentives rather than penalties, individuals would be free to choose.”

That requires some responsibility on the part of consumers, as Obamacare’s individual mandate is designed to do. But it does not tax them if they choose not to buy insurance, and by allowing people to buy catastrophic plans with the plan’s tax credits, there would be little reason for anyone not to maintain the kind of coverage that would render the old pre-existing conditions problem meaningless.

Medicaid Reform

The Walker plan cites a Heritage Foundation study which found 70 percent of those who have gained insurance under Obamacare did so via Medicaid. And Medicaid is, as the plan points out, a highly flawed plan:

“Medicaid’s current structure is an open-ended matching system, which acts as an incentive to classify any state and local service as Medicaid, regardless of the need that service aims to address. The more a state spends, the more money it receives from the federal government, creating a system where the main focus is not the needs of individuals and families. … If these flaws remain unaddressed, Medicaid is projected to cost a staggering $786 billion (3.1 percent of GDP) in 2022 — up from $25 billion (0.9 percent of GDP) in 1980.” (link added)

The Walker plan would give states more flexibility in administering Medicaid, as does Price’s plan, and new incentives to keep costs down. But it would also, uniquely as far as I’m aware, break Medicaid into three programs to reflect the reality that it is really a number of programs serving very different populations. There would be one to cover the poor, and two for the disabled and elderly poor: one for acute care and another for long-term care. They would be structured differently to reflect the different needs of each and to give states different incentives for containing costs.

***

There’s more to the Walker plan, which you can read here. But it boils down to a conservative vision of what health insurance ought to be: something that, as with other types of insurance, prevents financial ruin but doesn’t amount to “pre-paying for a large amount of routine care,” as Levin puts it. He elaborates on this bottom line:

“Liberals have increasingly been willing to acknowledge the growing evidence (though there has long been a lot of evidence) that insurance doesn’t improve health very much but rather provides much-needed financial security, but they have yet to allow this to reshape their basic view of what insurance ought to look like and what is really essential about it. Proposals like the one Walker put forth (Tuesday) are built on an answer to that question: everyone could afford at least catastrophic coverage if they wanted it, and beyond that there would be a competitive market in additional coverage and care. Meanwhile, Obamacare, because of the narrow space it provides for varying insurance design, has been yielding a lot of insurance products that look like upside-down insurance: very high out of pocket costs (often higher than what a pre-Obamacare catastrophic plan would have involved) coupled with extensive minimum coverage requirements, so that routine care is covered by insurance but unexpected calamities create financial disasters.”

By November 2016, Americans will have had a few years of experience with Obamacare (and, increasingly, with the delayed parts of it) to know whether they like this upside-down approach to insurance. Republicans, having failed to offer a compelling alternative in 2012, ought to make that case in 2016.

 

Reader Comments 0

64 comments
LDH2O
LDH2O

The free market place brought us double digit increases in healthcare for years. Under the ACA they slowed. Now he wants us to drink the Kool-Aide that failed policies will work. Right.

Kyle_Wingfield
Kyle_Wingfield moderator

@LDH2O

1. There was no free market place in health care before Obamacare.

2. Health care spending slowed due to the recession, before Obamacare was passed and took effect.

3. He's not talking about simply returning to pre-Obamacare.

Other than that ... nailed it!

heezback
heezback

There is indeed a long time ahead before the field is winnowed down to a number at which some meaningful dialogue will start to gel followed by robust comparative discussions taking place, but, I do like Walker at this point and have always respected his approach to the left's barrage and his courage in the face of same.  I feel that Walker is a problem solver with a good head on his shoulders and an ability to grasp concepts.  He is probably wise enough to seek out wisdom and advice in areas he may be lacking, which is always a good thing when talking leadership.  I don't see him as a guy with a big ego, but rather as someone who wants things to be better in our country.  Carson and Cruz are also similarly appealing, as are Rubio; Perry to a degree, and yes, even a measure of the Donald.

MarkVV
MarkVV

Like other Republican healthcare plans I have seen, Walker’s plan is based on the conservatives’ fantasy that healthcare insurance costs can be lowered using the free market principle of more competition among the insurance companies. It is the primitive idea of dealing with medical care as if it were shoes or cars or groceries. It would have that effect only if the profits of the insurance companies were so high that lowering them by competition would significantly lower the premiums. Little competition can raise premiums, but increasing it will have quickly diminishing returns.

In fact, there are only two ways the premium costs (or their increases) can be significantly reduced – by lowering the cost of the medical care itself, or by not providing it where necessary for a substantial number of people.

Obamacare is a cumbersome plan and can be improved, but it does work and even if a Republican promising to repeal it were elected, enough people would have the similar response as to the attacks on Social Security and Medicare: “Keep your hands off my Obamacare.”

LilBarryBailout
LilBarryBailout

@MarkVV

If you can think of only two ways to lower premiums, then you should leave things to Real Americans.

One other way would be for premiums to cover the cost of insuring the person paying the premium, instead of using it to subsidize the premiums of others.

Another other way would be to allow people the freedom to choose what their plan will cover, rather than having Washington bureaucrats decide such things.

Shall I continue?


lvg
lvg

Walker does not appeal to low voltage voters like Trump does.

Jefferson1776
Jefferson1776

Walker is wasting his time, someone else's money and breath,  as he has no chance,  Trump is killing him.

DawgDadII
DawgDadII

@Jefferson1776  Sample of one, but I would vote for Walker in a heartbeat, and I'm not at all convinced I'd vote for Trump. I don't need to be entertained by the President. In fact, I'm far beyond worn out on being entertained by our Presidents, and I suspect a lot of other people are, too. Wake me up when Trump tops 40% in the GOP polls.

straker
straker

Barry - "they don't need Mommy or Daddy"


Oh, the irony.

lvg
lvg

So Walker will keep that unfunded mandate in every ER that is pure socialism going which  is bedrock of Reagancare 

LilBarryBailout
LilBarryBailout

@lvg

Crickets.  Big surprise.

Since you're apparently in favor of the unfunded mandate, it's curious how often you pretend to criticize it.

FIGMO2
FIGMO2

A catastrophic coverage plan is the only way to go, in my opinion. My husband and I would opt for nothing MORE or less, if'n 'ya know what I mean. 

LilBarryBailout
LilBarryBailout

@FIGMO2

So you don't need tax payers to cover the cost of your incidentals, like bandaids and condoms and annual checkups?  You must be part of the 1%!

RafeHollister
RafeHollister

The biggest plus to repealing Obamacare is the benefit to the economy.  The rules that require companies to provide healthcare based on hours worked and number of employees, is killing the economy.  Robertscare is a disincentive to  companies on the bubble from expanding.  People are unable to make what they need to support their families as their hours are reduced by the ridiculous definition of full time employment.. 

RafeHollister
RafeHollister

@MarkVV @RafeHollister Much of the law doesn't kick in until Jan 2016, BTW.  From your study, it seems much of the figures were based on an assumption.


"The study, like ADP's analysis, only uses data from before the mandate took effect, on the assumption that employers would begin adjusting their workers' schedules beforehand. Yet Strain said that firms might still reduce their employees' hours in the future once they discover the cost of providing health care."



Claver
Claver

I do think the ACA will end up being with us a long time. Inertia is a powerful thing. Sure, a lot of people do not like it, but there is no consensus as to how to replace it.  Walker wants a backstop for catastrophic health issues.  Other conservatives want to go back to the pre-ACA framework.  Others want nothing at all.  A large portion of liberals (like The Donald?) still want single payer or Medicare for all. And then there is a growing group that is content with the ACA.  I think the repeal crowd and the single payer crowd will cancel each other out and nothing will change.

Kyle_Wingfield
Kyle_Wingfield moderator

@Claver No more than one of these folks will be elected president next year. That person will most likely shape the direction we take -- whatever that ends up being.

Claver
Claver

@Kyle_Wingfield @Claver No matter who gets elected, unless something passes both houses of Congress nothing happens and the ACA remains as is. The odds of Republicans having enough votes in the Senate after 2016 seems very slim.  The President could make some administrative modifications, but no wholesale changes. 

Kyle_Wingfield
Kyle_Wingfield moderator

@Claver All they'll need is 50, if they have the House and the president (and VP to break a tie). Remember, it passed the first time via reconciliation because Dems didn't have 60 votes. That's just one of the precedents Dems set over the past few years that they may come to regret ...

straker
straker

fez - "they're in it to make money"


Walker and the other Republican candidates will make sure they get every dollar they possibly can.


The rest of us must fend for ourselves.


Its the Republican way.

LilBarryBailout
LilBarryBailout

@straker

Big boys and girls fend for themselves.  They don't need Mommy or Daddy or Uncle Sugar to take care of them.

It's the Real American way (although you may prefer to call it the Republican way--fine).

Dusty2
Dusty2

Kyle


Just wondering if you heard the video taken at the Varsity by WSB when Jeb Bush was there.  He sounds very good and straight forward, the real answer to Trump.  I know he is not your favorite but hearing him discuss issues in a straight forward  sensible way is worth a listen. 

Kyle_Wingfield
Kyle_Wingfield moderator

@Dusty2 I haven't listened to it. I heard his speech at RedState a couple of weeks ago. He was good there -- much better than in the debate.

LogicalDude
LogicalDude

The pre-existing condition sure sounds like what left a bunch of people hurting before the ACA passed.  Put a better solution in place than going backwards. 


Medicaid restructuring sounds like it can be done today.  Why not put THAT in place as one of the "fixes" that the Republicans keep talking about?  There is no need to remove the full ACA to implement changes in Medicaid. 


Some of these can be good ideas, but the grand Republican push to "repeal ObamaCare" makes a lot of the good ideas fade into unworkable solutions.  This is probably why none of them have actually gotten out of committee in the many years that Republicans have been running congress. 


I thank you Kyle for pointing out this plan.  It's better than a lot of the Republispeak "we hate ObamaCare because, you know, OBAMA" that is so common these days. 

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude "The pre-existing condition sure sounds like what left a bunch of people hurting before the ACA passed."

I am unaware of a law that did what Walker aims to accomplish: Preventing people from being charged more/denied coverage by a new insurer due to a pre-existing condition. If you've had coverage with an insurer, you'd be able to get coverage without penalty with a new one even if you have a condition the new insurer would have to cover. I don't think that was necessarily the case before Obamacare (though it worked that way in practice for those whose new coverage was through a large employer; but then, those weren't the people who needed reform).

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude "How is the new plan different?"

It would ban insurers from doing what happened to you. That's the entire point.

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude Not really. It would require a measure of responsibility from consumers for the ban to take effect ... but, unlike Obamacare, it doesn't penalize them for making a different choice. Of course, every bit of this was in the OP ...

LogicalDude
LogicalDude

@Kyle_Wingfield @LogicalDude When I moved to a new insurer, they tried to deny me because of "pre-existing conditions" due to lack of coverage.  I contacted them with "proof of insurance" coverage, and they removed the denial. 


How is the new plan different? 

It sounds the same.  If you didn't have coverage, they can deny you based on "pre-existing conditions". 

LogicalDude
LogicalDude

@Kyle_Wingfield @LogicalDude Right, like I said in the first place.  "it would require a measure of responsibility", meaning "you need to have prior coverage before we cover you" 


Just like in my example. (that you said was wrong)


Just like it was before the ACA. (If you do not have coverage, and you sign up for coverage, you can be denied for "pre-existing conditions". )


If "It would require a measure of responsibility" does not mean "have prior insurance coverage", can you clarify what you mean, or or Walker means? That might be something I missed. 

If someone does not have a "measure of responsibility" then it sounds like coverage can be denied; which is what I was saying the whole time. 


Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude He's talking about changing the law, not going back to the status quo ante. Your pointing out that the previous law didn't suffice only underscores the need to do that.

LilBarryBailout
LilBarryBailout

@LogicalDude

There is no such thing as "insurance" for folks with pre-existing conditions.  There is only charity.  Insurance is for big expensive things that haven't happened yet, and might never happen.

If leftists were serious about fixing the pre-existing condition problem (and the free rider problem) they would have made the penalties for not purchasing insurance much, much higher and they would have repealed the law that requires hospitals to treat people who can't pay.  Leftists aren't serious about fixing those problems though, they're only serious about taking money from Real Americans who work for a living and handing it out to their voters.

LilBarryBailout
LilBarryBailout

Leftists define a "plan" as something that increases taxes, increases government spending, or gives government more control.  Preferably all three.

More freedom is not a plan to them.

MANGLER
MANGLER

It looks like is the main comparison would be between the ACA's focus on primary and preventative care vs. the Walker plan focusing on not worrying about that, but giving a (gasp) social security safety net of catastrophic coverage.

Well, with no system set up to attempt to provide the preventative coverage, how long until the catastrophic visits will start costing more than the annual checkups would have?

fez
fez

If this plan does nothing to reign in insurance companies, who are the real problem with our healthcare system, then this is just more lip service.  Healthcare should be about delivering quality care, not squeezing as much money as possible from the consumers and physicians.  Obviously, they're in it to make money, but there has to be a better way.

RafeHollister
RafeHollister

@fez This plan emphasizes competition, which is the only way to bring down prices and "rein in insurance companies".  The Robertscare plan did nothing, nothing to address cost control.  In fact it was an insurance company bonanza, where they can make ever how much they can and have the assurance from government that their losses will be covered.  Often there are places in the country where there is only one plan available and they charge as much as they can get away with.  As Trump has pointed out, they draw up these lines around states and divvy up the spoils.

fez
fez

@RafeHollister If anyone trusts insurance companies to compete rather than collude, they're delusional.  

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude "How do you decide to shop for services when your leg is broken and you are delirious?"

Ah, the old how-do-you-shop-from-the-ambulance canard. Something like 2% of medical costs are related to emergencies. The lion's share of costs stem from care of chronic issues, which certainly affords one the time/ability to compare doctors.

One thing missing from Walker's plan, or at least this summary of it, is price transparency. The reason it's hard to compare providers now is, as you noted, it's hard to determine beforehand what you'll actually pay.

RafeHollister
RafeHollister

@fez @RafeHollister Anyone who trusts government to level the playing field is delusional.  Crony capitalism is alive and doing well in America.

RafeHollister
RafeHollister

@LogicalDude @RafeHollister @fez So, government should make sure you don't lose one penny if you make bad choices?  You choose the best plan you can, absorb your mistakes and move on to another, if you are not happy with their coverage.  It is just like your cable provider, they are all different and you get different packages from each and their prices and customer service vary wildly.  You don't expect the government to absorb what is left on the contract you signed with the cable company, just because you find out later you are getting ripped off and not getting the service you contracted for.

LogicalDude
LogicalDude

@RafeHollister @fez "competition"

Which competition will this reign in? 

Pharmaceutical costs? (many times you do not know the costs until you get the drugs.  For my last two plans, the summary said one price, and real life said something different.) 

Plan costs (premiums/deductibles/coverage)

Healthcare costs? This is where true competition is non-existent.  How do you decide to shop for services when your leg is broken and you are delirious?  Caregivers know this, so they charge what they want. Insurance companies are in on the deal, so they give "discounts" for their patients who are "in-network". 

fez
fez

@RafeHollister I didn't say anything about trusting the government.  Crony capitalism is alive and well, largely in part due to the lobbyists for the insurance companies.  So back to my original point that you've hijacked below, until the insurance companies and their lobbyists are reined in, this plan isn't going to solve the problems with the nation's healthcare.  Prices for service and insurance plans continue to go up, providers say they're getting less of the cut, and it's business as usual for most folks as they continue their partisan bickering.

Dusty2
Dusty2

Kyle,


This sounds like a better plan.  But I don't think the public will understand it well enough to make a change.  ObamaCare has so many problems but I don't think that a majority believes something else will be better.  They know healthcare is expensive but those that are young & healthy  don't worry much about it.  The others think it is FREE as they head to the ER for the sniffles. 


(I  saw my doctor yesterday for a routine checkup and she was shaking her head over the impositions placed on doctors now by government.).