House Speaker John Boehner, R-Ohio, said on Wednesday night that after nearly five years of opposing President Obama’s healthcare law, Republicans were preparing to release an alternative in this Congress. “There will be an alternative and you’ll get to see it,” Boehner told Fox News‘ Brett Baier.
This is a worthy goal that’s long overdue, but one that’s easier said than done. As I detail in my new book, Overcoming Obamacare, the problem isn’t that Republicans haven’t released any healthcare plans, but that they’ve had trouble rallying around a single one due to some fundamental differences. If Republicans are going to coalesce around an alternative, they will have to reach consensus on the following issues.
Does Obamacare need to be fully repealed?
Most elected Republicans aren’t going to publicly take any position short of full repeal, but as the number of individuals receiving some kind of health insurance through Obamacare reaches well into the millions, there is a debate on the right over whether full repeal is still feasible. Manhattan Institute health care scholar Avik Roy has unveiled an Obamacare alternative that wouldn’t require repeal of the law, but would instead reform the law and use that as the basis to advance free market reforms to Medicare and Medicaid.
How broadly should any alternative expand access to health insurance coverage?
Republicans may not be ready to abandon the idea of full repeal, but even if the law were replaced, the GOP will still likely grapple with the question of what to do about those who are currently benefitting from Obamacare (or stand to benefit from the law).
A Republican alternative unveiled last year by Sens. Orrin Hatch, Richard Burr and now-retired Tom Coburn tried to tackle this question. For instance, the law would require insurers to allow those with pre-existing conditions who gained coverage under Obamacare to keep their insurance as long as they don’t let their coverage lapse. The bill would also offer tax credits to individuals to purchase insurance, though those subsidies would be less generous than Obamacare.
In contrast, Gov. Bobby Jindal released a plan that focused less on expanding coverage, and instead was built around changes to tax and regulatory policy to foster the creation of a free market that would drive down costs. He, along with many conservatives and libertarians, reject the premise that Republicans should be trying to compete with Democrats over how many Americans they can insure, given that liberals will always be willing to spend more.
Should Republicans return taxes and spending to pre-Obamacare levels?
Republicans voted against all the taxes (roughly $1 trillion) and spending (roughly $2 trillion) within Obamacare when the legislation was being debated. But now that the law is in effect, the Congressional Budget Office has included it in its baseline assumptions of what tax and spending levels will be like over the next decade. So, if Republicans depend on these assumptions, then they can theoretically come up with an alternative that could spend $1 trillion, and still be touted as a $1 trillion spending cut, because of the savings relative to Obamacare. This would give them a lot more breathing room to develop proposals to offer broad benefits. However, many conservatives and libertarians would argue against this approach, insisting that Republicans wipe out all of the taxes and spending in Obamacare, and build an alternative from scratch.
The Coburn-Burr-Hatch plan did rely on Obamacare tax and spending levels. The argument in favor of this approach, beyond the fact that it makes crafting an alternative easier, is that it’s simply odd to go back to a baseline that pretends Obamacare, which has been on the books for five years, had never passed. In contrast, when Jindal announced his plan last year, he made it clear “I’m not spending the Obamacare money.” That is likely to be the position of many Republicans.
Rep. Paul Ryan, who is now chairman of Ways and Means (one of the three committees with jurisdiction over health care legislation), told me in a September 2014 interview that he agreed with Jindal on this point.
“I’d go back to the pre-Obamacare baseline is what I’d do,” Ryan said. “I think that’s the way to go, because we shouldn’t assume we’re going to have an explosive entitlement and then just replace it with our own. So I would go back to the pre-Obamacare — I would start over, quite frankly.”
How should the tax code treat health insurance?
It may sound arcane for people to argue about whether health insurance should be reformed around tax credits or tax deductions, but this is actually one of the fiercest health policy debates on the right largely because it’s a proxy for the broader debate over how much of a role government should be playing in expanding health coverage.
Giving individuals a standard deduction to purchase health insurance means that they could purchase health insurance with pre-tax dollars. The biggest criticism of this approach is that it doesn’t provide much benefit to those who owe little or no taxes to against which to deduct. That’s why other Republicans favor a tax credit-based approach, in which individuals receive a set amount of dollars, and they still get paid even if they don’t owe taxes. But this approach is less attractive for many limited government advocates, because it represents what is effectively government spending, as opposed to a deduction, which lowers individuals’ tax burdens.
How should an alternative handle employer-based insurance?
Traditionally, pre-Obamacare Republican alternatives were based around the idea of moving away from a system in which most people get their private insurance through their employers into one in which individuals have direct control over their health care dollars. But several factors have given many Republicans pause.
One is the experience of the 2008 presidential campaign, when Obama successfully pummeled John McCain for a proposal that would have migrated the healthcare system away from employer-based insurance. Another is the memory of the backlash against Obama when his law resulted in millions of Americans losing their health coverage, despite his promises to the contrary. Roughly half of the American population is insured through their employers, and Republicans are concerned an even larger disruption causing an even stronger backlash. There is also some sentiment on the right that the widespread attachment to employer coverage may be the strongest remaining defense against a fully government-run single-payer system.
