In a speech on health policy in New Hampshire on Tuesday, Jeb Bush pledged to repeal the Affordable Care Act and replace it with a new system that would offer tax credits to purchase private coverage while weakening protections for Americans with preexisting conditions.
“You can’t fix something that was a failure from the start,” the former Florida governor said of the ACA. “We have to start over and when I become president I will work immediately to repeal and replace Obamacare with a system that looks more like the successful systems and enterprises of our great country.”
Bush’s plan, posted to his website, is short on details and completely devoid of cost estimates, making it tough to compare directly to other proposals. As is the case under the current system, Americans would still primarily get health insurance through their job, but Bush would also provide a refundable tax credit to help people buy basic coverage if they can’t get it through work. To help cut costs, it would cap the dollar amount of coverage employers can deduct from their taxes. Bush has already proposed eliminating one key source of funding for the Affordable Care Act, a surcharge on the top capital gains tax for wealthy investors, in his tax reform plan.
Bush’s plan also puts more emphasis on states. According to the outline provided by the campaign, states would receive a fixed amount of funding and then be asked to provide “affordable, catastrophic plans in their states” while lowering health costs using their own mix of policy proposals. Although the plan does not mention Medicaid, Bush excoriated the ACA’s reliance on expanded federal funding – made optional by a 2012 Supreme Court decision – to expand the low-income federal insurance program in states on Tuesday.
“More than half of those getting insurance [under the ACA] so far are enrolled in Medicaid, but it turns out being on Medicaid isn’t necessarily a better deal than being uninsured,” Bush said, pointing to a University of Oregon study that found enrollment in Medicaid had little immediate impact on the average patient’s physical health (although, importantly, it did save them money and improve mental health).
While repealing Obamacare has been a unifying cause for the GOP, the party has never coalesced around a replacement, mainly because like the law itself, it involves a series of trade-offs that are either practically, politically, or ideologically difficult to pull off. Meanwhile, the ACA has been remarkably successful in achieving its primary objective: it has reduced the uninsured by an estimated 17 million people since its coverage expansion went into effect in 2013. Any plan that realistically preserves insurance for any significant portion is going to cost more money than a lot of small government conservative are comfortable paying. Kicking millions off insurance, however, would hand Democrats an electoral weapon and runs counter to Republican criticism that Obama’s law violated his pledge that “If you like your plan, you can keep your plan.” Partly due to these constraints, Congressional Republicans have yet to pass a bill to replace Obamacare despite years of assertions that such legislation was right around the corner.
In Bush’s case, one of the toughest trade-offs is likely to come from Americans with pre-existing conditions, whose situation was drastically improved by the ACA. The law forced insurance companies to offer them coverage, put caps on out-of-pocket spending, and implemented a mandate to buy health insurance to make sure that there were enough young and healthy people on the same plans to keep their costs from becoming unaffordable. Republicans loathe the mandate and complain the requirements for insurers to provide certain services drive up costs, but alternatives like subsidized markets for high-risk patients have proven unsuccessful so far.
Bush’s plan would only encourage states to provide care for people with pre-existing conditions who maintain “continuous” coverage, a difficult prospect for someone whose health or job situation causes financial hardship. The plan also focuses on subsidizing “catastrophic” insurance – i.e. cheaper and less far-reaching – that’s likely more attractive to people with limited health needs who would enjoy lower premiums rather than patients with chronic conditions who would rack up high out-of-pocket costs.
On the right, conservative health care reporter Phillip Klein noted in the Washington Examiner that Bush’s plan is vulnerable to attack from Republicans like Bobby Jindal, who have argued that the government should be less generous in subsidizing health coverage on principle and that the GOP should use the pre-Obamacare health system as its baseline for spending.
“Jeb’s plan is Obamacare lite,”Jindal said in a statement Tuesday. He mockingly suggested Bush join the Democratic debate in Las Vegas to defend the roposal.
Other conservatives were more supportive. The influential commentator Yuval Levin praised Bush in National Review for finding a balance between addressing “both the problems created or exacerbated by Obamacare and to the serious flaws of the pre-Obamacare health-financing system.”
Henry Aaron, a senior fellow at the Brookings Institution, noted that Bush’s plan bears some similarities both to the ACA and to a plan offered by a trio of Republican Senators in its framework of using tax credits to subsidize health coverage, but he the details were still far too sparse to fully evaluate it.
“When I got to the bottom of page 2, my reaction was ‘Well, that is an introduction. Now, we’ll see the plan,” Aaron said. “But the paper stops then, at the second page.”