GOP health plan focuses on costs

Louisiana Gov. Bobby Jindal’s plan to replace the Affordable Care Act doesn’t exactly break new ground. Jindal, who has health-care credibility in conservative circles, offered up reforms long favored by the right as he signaled his strong desire to eliminate the president’s health care law.

But the plan he unveiled Wednesday is worth noting for a couple of reasons.

Four years after the passage of the president’s health-care law, the GOP hasn’t united behind a replacement, but we can piece together what a Republican administration’s health policy might look like based on the various plans that have emerged. Also, Jindal is the first likely 2016 Republican presidential candidate to offer a vision for health care, and other candidates will also have to explain what they’d do differently from the health-care law backed by President Barack Obama.

Here are the main features of Jindal’s plan:

1. Full repeal of the Affordable Care Act. Jindal’s plan, issued by his America Next policy shop, contends that full repeal is possible, though it also points out why this would be difficult. Jindal doesn’t offer a timeline for when full repeal could be achieved, other than to say it will take time. The tricky part, he acknowledges, is that states have already changed their laws to adapt to the federal program. “Hopefully, states will re-write their laws to eradicate Obamacare from their statute books,” Jindal writes. It’s really hard to imagine, though, that blue states would willingly give up their health insurance marketplaces and reverse the health-care law’s insurance market reforms, like a ban on discriminating against pre-existing conditions.

2. No more pre-existing condition ban. The Affordable Care Act bans insurers from denying people coverage or charging them more because of a preexisting condition. To make sure enough healthy people participate in the program to offset sicker customers, the law mandates people to have coverage, and it provides subsidies to help afford insurance. That’s the basic idea, anyway. Jindal’s plan seemingly eliminates the health care law’s pre-existing condition provision. His plan instead provides $100 billion to states to design their health-care programs, with a requirement that they find their own way to “guarantee access” to coverage for risker patients. He suggests high-risk pools and reinsurance programs as possible mechanisms, but the key thing here is that states are left to figure out how to cover people with pre-existing conditions.

3. Eliminate tax preference for employer coverage. One of the biggest disparities in the health insurance system is that employers can purchase health coverage with pre-tax dollars, while individuals can’t. In this plan, Jindal proposes a standard deduction for individuals purchasing their own insurance. His report cites a 2007 Lewin Group study that found the policy would reduce the number of uninsured by 9.2 million. The same report also found that 2.3 million would lose employer-based coverage when the tax preference for employer-sponsored insurance is eliminated. It just shows that with any major health-care reform, there are going to be winners and losers.

4. Medicare premium support. Jindal’s plan embraces premium support in Medicare, most notably pushed by House Budget Chairman Paul Ryan the past few years. The idea of premium support is essentially to give seniors a contribution to purchase health plans from private insurers, who would compete for their business, while restraining the growth of Medicare. Democrats have mostly attacked premium support for eliminating a guaranteed benefit, but some in the party have backed the concept. Sen. Ron Wyden, D-Ore., now chairman of the powerful Finance Committee, even authored a paper with Ryan more than two years ago outlining a premium support plan. But key details matter, such as how much the government’s contribution to seniors’ health plans would rise each year. Jindal’s plan doesn’t offer that level of detail or say how quickly the transition to premium support would take place. However, Jindal’s plan does offer the traditional Medicare program as an option.

5. Cap Medicaid spending. The plan transforms Medicaid into a block grant program, an idea pushed by some conservatives for years and strongly opposed by Democrats. A block grant basically gives states a set amount of funding to design programs to cover their lowest-income residents. It also comes with major cuts to the program. Ryan’s 2015 budget, which again includes block grants, would reduce federal support to the program by $732 billion in the next decade, according to the left-leaning Center on Budget and Policy Priorities. But conservatives argue that states could run the program more efficiently as Medicaid takes up a greater share of their budgets.

6. Other reforms. The plan includes some other reforms that conservatives have long favored. These include the sale of insurance across state lines, capping medical liability lawsuits, expanding health savings accounts and letting businesses pool their purchasing power for health insurance.

Jindal doesn’t offer a projection of many how many more uninsured would gain coverage under his plan. But that’s not the main point of it. “We focus first and foremost on reducing health care costs – because while most Americans want to buy health care and health insurance, many of them struggle to afford it,” the plan read.

There are some key differences between Jindal’s plan and the one recently offered by Republican Sens. Richard Burr, R-N.C., Tom Coburn, R-Okla., and Orrin Hatch, R-Utah. The senators’ plan would actually limit the employer tax exclusion to 65 percent of the cost of the average plan. Their plan also keeps some concepts from the Affordable Care Act, such as dependent coverage up to age 26, a less stringent ban on pre-existing condition discrimination and tax credits for low-income people to purchase health insurance.

We’re still waiting on other GOP replacement health plans. The House is looking at putting together its own package this year, and other Republican candidates looking at 2016 will have to offer serious proposals on what to do with health care.

They’ll also have to deal with the fact that millions are newly insured by the law. As New York Times conservative columnist Ross Douthat wrote the other day, that’s a hard constituency to ignore. “And that fact will shape, and constrain, the options of the law’s opponents even in the event that Republicans manage to reclaim the White House two years hence,” he wrote.

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