Is it worth the wait? Is this promised “ObamaCare replacement” any good?
Let’s call this live-blogging of the proposal from Senator Coburn, found, among other places I’m sure, on the weeklystandard.com site.
Ready? Here goes:
Section 101: ObamaCare to be repealed in full.
Sectiono 201: adopt consumer protections. 1) no lifetime limits. 2) Move from a 3:1 old:young premium ratio to a 5:1 ratio as a baseline, but permitting any state to opt out and elect alternate ratios, or none at all. 3) keep the dependent coverage to age 26, but allow any state to opt out. 4) Guaranteed renewability: regardless of health status. Good, good, good, good.
Section 202: pre-exsiting condition protections. Any individual can change health insurance plans, whether in individual, small group, or large employer markets, without medical underwriting, so long as they’ve been continuously enrolled in a health insurance plan with “at least catastrophic coverage” for at least 18 months. In addition, a one-time open enrollment period would provide an enrollment opportunity for all. Not quite right: given the large difference between a plan with a $10,000 deductible and a $100 deductible, it shouldn’t be permitted to switch from one to the other upon getting sick, either.
Section 203: “Empowering Small Business and Individuals with Purchasing Power.” Targeted tax credit for “certain individuals” to buy health care — that is, those working for employers with less than 100 employees, but with no requirement to buy any particular sort of coverage. Credits for individuals with income up to 300% of poverty line — refundable, advanceable, phased out over 200% to 300% of poverty, increasing at CPI + 1%. Three age bands, and different amounts for individuals & family, from $1,560/$3,400 at age 18 – 34 to $3,720 – $8,810 at 50 – 64. This is the most poorly thought-out part. Why only three age bands? These credits need to be based on the age and sex of every family member. And why only employees of small employers? It leaves those working for large employers without health insurance just as stuck as before. (Though the text was confusing on this point — maybe poor editing masked an intention to cover more people.) There’s also no explanation of how credit eligibility and amounts work for married couples.
Section 204: More Tools for States. States can randomly default non-enrolling individuals in to a plan with premiums equal to the value of the tax credit, though individuals can switch or even opt-out altogether. Funding for high-risk pools at the state level. Small businesses can negotiate small business health plans. States can enter interstate compacts for pooling and reduced administrative cost. Fine. Fine. Fine.
Section 204 (the editing was poor; there are two section 204s): Expansion of consumer-directed healthcare. Removal of restrictions on OTC medications, and use of veterans and others of health savings accounts. Allow HSAs to pay premiums for LTC insurance, COBRA premiums, and HSA-qualified policies.
Section 301: Medicaid reforms. Medicaid recipients can also elect to use the tax credit. Fixed amounts to states, allocated based on #s below poverty line, growing at CPI + 1%.
Section 302: reauthorize Health Opportunity Accounts, demonstrating program implementing savings accounts + high deductible plans for Medicaid.
Section 401: Medical malpractice reforms, such as an “Administrative Health Care Tribunal”
Section 501: transparency requirements.
Section 601: Cap the tax exclusion for employee’s health coverage at 65% of an average plan’s costs, growing at CPI + 1%. Repeal employer mandate. I read something earlier indicating that this probably means 65th percentile. Not sure how this plays out over the long term.
The bottom line:
The biggest problem with this proposal is that the tax credits are still very poorly thought out. The one improvement on prior proposals is that at least there are age bands on the credits, but that’s such a small improvement, and other parts of the proposal are still flaky and so undefined as to indicate that there’s not much thought put into the proposal, such as the distinction between large and small employers as far as eligibility.
What next? It’s disappointing. I suppose that’s why there’s so little reporting on this proposal. And this is where I really wish there was some value in the old counsel to “write your Senator.”
UPDATE: The more I think about it, the more appalled I am that this proposal, which was spoken of so favorably at The Weekly Standard and the National Review, is such a bust, and, it seems to me, likely to be just as ignored as every proposal before it.
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