Republican Obamacare Repeal Plan LEAKS: 6 Good Ideas, 4 Bad Ones

On Friday, Rep. Mo Brooks (R-AL) said that Republicans might not repeal Obamacare because of the political costs associated with the fallout. Speaking with a local radio show in Alabama, Brooks stated, “there are, in my opinion, a significant number of congressmen who are being impacted by these kinds of protests and their spine is a little bit weak. And I don’t know if we’re going to be able to repeal Obamacare now because these folks who support Obamacare are very active, they’re putting pressure on congressmen and there’s not a counter-effort to steel the spine of some of these congressmen in tossup districts around the country.”

That could very well be true. It would also explain the draft Obamacare repeal and replace plan now circulating around Capitol Hill. That draft has some good ideas, but it also has some pretty terrible ideas re-enshrining central provisions of Obamacare. The biggest problem is this: by assuming the replacement of Obamacare with a non-transitional plan toward a nearly open market, Republicans take ownership of a government policy that shouldn’t be in the hands of the government.

Here are some of the good ideas:

1. Trashing The Individual Mandate. The draft Republican bill would get rid of the individual mandate – the provision that should have killed Obamacare in the first place at the Supreme Court level. That means no one will be forced to buy insurance.

2. Delayed Death Of Medicaid Expansion. One of the keys to Obamacare has been the federal government propping up state expansions of Medicaid program. This has effectively put millions of Americans on the public rolls. The House plan would phase out such aid, putting the onus back on the states, which is where it should be.

3. Relieving Restrictions on Age Charging. Obamacare limits insurers to charging three times as much in premiums to older customers versus younger customers; Republicans would allow insurers to charge five times as much. They truly should place no limit.

4. Dumps Federal Funding For Abortion Providers. This would strip Planned Parenthood of its federal funding. That’s great news.

5. Grandfathering In Old Plans. If you like your old insurance plan, you can keep it so long as your insurer continues to offer it.

6. Kill Obamacare Taxes. This would include destroying the medical device tax, as well as the tanning bed tax.

Here are some of the bad ones:

1. Taxing Cadillac Plans. Republicans ripped President Obama up and down when he began taxing so-called Cadillac health insurance plans. Unions were particularly upset with Obama’s tax on Cadillac plans. Now, Republicans plan to limit tax breaks on those high-end health plans.

2. Creating Age-Based Subsidies. Instead of handing out income-based subsidies – giving more money to people who are low-income for health insurance – the House plan gives age-based subsidies. The older you are, the bigger the subsidy you receive. This encourages younger people not to get health insurance and instead wait to get older to buy insurance, although it is definitely an improvement over income-based restrictions, since income is not a predictor of healthcare cost while age is.

3. Subsidies For High-Risk Pools. In this case, the federal government would provide $10 billion in “state innovation grants” for the sickest or riskiest health insurance enrollees every year through 2026. This will likely become permanent, not transitional, meaning that there will be a subsidy for those who are high-risk and choose not to insure themselves.

4. Penalizing Lapses. If you let your health insurance lapse and want to re-enter the market, this plan would penalize you 30 percent for that privilege. That’s designed to push you to keep renewing. In a free market, the push to renew would be obvious: if you’re not insured, you’re not insured, and you pay the price for re-insuring.

Republicans are terrified of voting on anything that affects benefits and subsidies. This plan is a step in the right direction in some ways, but it’s an admission that Obamacare is here to stay in others. And President Trump hasn’t weighed in on any of this. There is no provision forcing insurers to cover pre-existing conditions, for example; Trump has seemed to want it both ways on this issue, saying those with pre-existing conditions will be covered, but saying that we might be able to do so with competition. Will he withstand the headlines regarding depriving those with pre-existing conditions of health care thanks to lack of a legal mandate to do so?

Obamacare was politically smart for Democrats because it was a ticking time bomb: a failing system that would require either more government intervention, or dismantling – and in which a dismantling would throw some people off the system. That means Republicans will either have to choose between fixing this thing and facing down the press, or caving and leaving most of it in place.