Scott Walker Releases Proposal To “Repeal And Replace” Obamacare

Scott Walker Announces Plan To Repeal And Replace The Affordable Care Act. Republican presidential candidate and Wisconsin Governor Scott Walker outlined his plan to “repeal and replace” Obamacare in a speech on August 18. Claiming he would send his health care bill to Congress “on [his] first day as president,” Walker proposed a series of tax credits based on age that would allow those who need insurance to purchase it. According to The New York Times:

Mr. Walker's plan makes a full repeal of the law his top priority, then proposes a system of tax credits that would allow Americans who do not get health insurance through their employers to purchase individual plans. The credits would be based on age, and consumers could then decide what plan to purchase, if they opt to buy health insurance at all.

“On my very first day as president of the United States, I will send legislation to the Congress to once and for all repeal Obamacare entirely,” Mr. Walker said in a speech in Minnesota. [The New York Times, 8/18/15]

Walker's Costly Proposal Would Disproportionately Harm Low-Income Americans And Those With Preexisting Conditions, Mainstream Media Explain

NY Times' Upshot: Walker's Plan Would Disproportionately Harm Low-Income People And Those With “Prior Illnesses.” The New York Times' Upshot blog emphasized in an August 18 post that Walker's proposal would hurt poor Americans and those with pre-existing illnesses. Explaining that the proposal would “roll back Medicaid expansion that has provided free insurance to low-income Americans,” leaving “people without a lot to spend on insurance” without comprehensive coverage, the post noted Walker's plan would actually benefit the rich who could “get more federal money to buy insurance plans.” Walker's plan would also “make it harder for people with prior illnesses to buy insurance”:

Governor Walker's plan appears to be less generous for many poor Americans. It would roll back the Medicaid expansion that has provided free insurance to low-income adults. It would distribute tax credits to those with private coverage on the basis of age, not income. Such a system would be far simpler to administer: Every person 50 to 64 would be given $3,000 to spend on health insurance, while everyone 18 to 34 would get $1,200. Older people tend to have higher health care costs, and are charged higher insurance premiums, the argument for the age-based subsidy system. But it means that for people without a lot to spend on insurance, a comprehensive health plan may slip back out of reach. For others, an affordable plan might be so bare-bones that it wouldn't kick in before a major health catastrophe.

Wealthier people, on the other hand, could fare better under this plan, as long as they're healthy. They would get more federal money to buy insurance plans, and they would have the choice of buying cheaper, less comprehensive plans than those offered under Obamacare rules.

The plan could make it harder for people with prior illnesses to buy insurance. Under Obamacare, insurers have to offer the same products and charge the same prices to customers of the same age, regardless of their health histories. The Walker plan would offer similar protections for people who remain insured for their entire lives. But anyone with a major gap in coverage could later be either priced out of the insurance market or disallowed from buying certain health plans. [The New York Times, 8/18/15]

NBC News: Walker's Plan Could Allow States To Use Medicaid Funding For Drug Testing.  On August 18, NBC News explained that Walker's plan is “much different” than the Affordable Care Act (ACA), and would repeal most of the health care regulations the ACA established. Walker's plan “would provide states with Medicaid funding, but allow them to determine who is eligible,” which ultimately could permit states to use Medicaid funds for drug testing: 

How is this different from Obamacare?

Much different. To put it simply, the ACA is full of federal rules governing health care, and Walker wants to get rid of most of them. The ACA gives states billions of dollars to expand Medicaid, the program for low-income people, but with a number of stipulations on how those funds can be spent. (A state can't require Medicaid recipients to take drug tests, for example.)

Walker would provide states with Medicaid funding, but allow them to determine who is eligible. So this would mean that poor people in liberal Massachusetts are able to get insurance easier through Medicaid than those in conservative states like Texas, which might require drug tests if it was allowed by the federal government. [NBC News, 8/18/15] 

Vox: Walker's Plan Would Not Protect Americans With Pre-Existing Conditions. In an August 18 article, Vox noted that Walker's claim that his plan would "'protect all Americans with pre-existing conditions," is “not accurate,” because it would only protect Americans with pre-existing conditions “who have continuous coverage - who never have a lapse between their plans.” As Vox points out, studies have found that just between “2004 and 2007, 89 million Americans had at least a one-month gap in coverage”:

Walker's plan says it would “protect all Americans with pre-existing conditions,” but when you read the fine print, you realize that's not accurate. It would only bar preexisting conditions for Americans who have continuous coverage -- who never have a lapse between their plans. But there aren't any protections mentioned for people who do drop coverage at some point. This group is big: One study found that between 2004 and 2007, 89 million Americans had at least a one-month gap in coverage.

Walker would cover these people with preexisting condition pools. He writes his plan “would make it easier for states to expand those pools.” He does not explain how, exactly, this would work. 

For those without preexisting conditions, Walker's plan would take steps to deregulate the individual market. It would no longer require insurance plans to cover a core set of benefits (Obamacare has a set of “essential benefits,” including preventive care and pregnancy costs, that insurers must cover). This would likely mean the benefits available to people buying their own coverage would become cheaper -- since they cover fewer services -- but also less robust.

[...]

A world in which Obamacare is repealed, and the Walker plan enacted, is one in which the individual market is friendlier to higher-income, healthy shoppers -- but likely worse for the poor and the sick, both those seeking private coverage and those on Medicaid. [Vox, 8/18/15]

Vox: Walker's Plan Would Be “Worse For The Poor And The Sick.” Vox explained that enacting Walker's health care plan and repealing Obamacare would ultimately “be worse for the poor and the sick,” because Walker's tax credits for health care are based on age, which benefits high earners but disproportionately hurts the poor:

The Walker plan repeals Obamacare and replaces it with a different tax credit-based system. While Obamacare's tax credits are tethered to income (lower earners get more help), Walker's plan would base tax credits on age.

For high earners, this might be great. Under Walker's plan, Taylor Swift would get $1,200 to help buy coverage because she's 25, while Obamacare would give her nothing on the grounds that she's superrich. For lower-income people, this is a lousy deal: A 25-year-old earning $17,000 at a low-wage job would get a $1,962 credit under Obamacare. [Vox, 8/18/15]

Vox: Walker's Plan Would Position Republicans To Make “Significant Cuts” To Medicaid Funding. Vox pointed out that Walker's plan to give block grants to the states for Medicaid would pave the way for Republicans to make “significant cuts to the program.” These cuts are not specifically mentioned in the plan, but similar Republican plans have “universally” slashed Medicaid funding. Media Matters has previously noted that past attempts to cut Medicaid funding would have hurt providers and low-income or elderly patients, caused job losses, resulted in millions losing their coverage, and costs states billions of dollars.

The Walker plan would turn Medicaid into a block grant program. In its simplest form, turning Medicaid into a “block grant” simply means handing control of the program -- and the funding for it -- over to the states. Instead of paying a set percentage of each enrollee's bill, the program would pay a specific amount to each state. It would then be up to the states to figure out how to best spend those funds.

In theory, there's nothing about a block grant proposal that commits the government to cutting Medicaid funding. In actuality though, Republican plans to block grant Medicaid universally make significant cuts to the program -- cuts that experts say can't just happen by making the program more efficient.

The Kaiser Family Foundation assessed the block grant proposal in Budget Committee Chair Rep. Paul Ryan's 2012 budget and estimated that it would mean between 14 and 20 million fewer people receiving Medicaid by 2022. [Vox, 8/18/15] [Media Matters, 8/10/12]

Bloomberg: Walker's Plan Would Be Expensive And Provide Fewer Protections For Americans With Preexisting Conditions. On August 18, Bloomberg's Sahil Kapur explained that Walker's plan would “cost the government a substantial amount of money,” while repealing “all the revenue sources in the Affordable Care Act.” According to Kapur, the plan would be expensive because it provides “less robust protections” to Americans with pre-existing conditions and encourages high-risk pools, which haven't worked in the past due to high costs:  

One of the most far-reaching pieces of Walker's proposal is to let health insurers sell plans across state lines, which is currently prohibited in order to let each state establish its own rules. While this idea is backed by conservatives as a way to encourage competition, critics fear it would motivate insurers to migrate to the states with the least regulations and sell the more bare-bones policies across the country.

“If you allow the sale of insurance across state lines with no minimum federal rules, insurers would gravitate to states with little regulation,” said Larry Levitt, a health policy expert with the nonpartisan Kaiser Family Foundation.

Walker's plan includes less robust protections for people with preexisting conditions than Obamacare; rather than force insurers to accept everyone, he proposes to protect people who maintain continuous coverage while they switch between policies. He also proposes state-based high-risk pools, saying his plan “would make it easier for states to expand” them. Many states already have high-risk pools, but they haven't worked well because, due to the fact that they cover many poor and sick people, they have high costs and are generally underfunded, experts say. Federal dollars would help, but the Republican-led House hasn't shown interest in spending much money on the idea.

[...]

Levitt pointed to a central problem with Walker's plan: the cost. Functioning high-risk pools are very expensive, as are his proposed tax credits. That's a tall order for a plan that eliminates the $1 trillion in largely upper-income taxes imposed by Obamacare, and in a Congress run by anti-spending Republicans.

“The tax credits would cost the federal government a substantial amount of money, but the plan would repeal all the revenue sources in the Affordable Care Act,” Levitt said. “As we start to get details about ACA replacement plans, it will become apparent how much disruption they would create. The ACA is now the status quo, and plans like this would upend coverage for a lot of people.” [Bloomberg, 8/18/15]

Bloomberg: Walker's Plan “Turns Over Medicaid,” To The States Which Could Disproportionately Hurt Low-Income Americans. Bloomberg's Kapur further explained that Walker's plan would “turns over Medicaid, a joint federal-state program to provide insurance for low-income Americans, to the states, with limits on federal funding,” which in practice could "'dramatically cut Medicaid coverage'":

The plan also turns over Medicaid, a joint federal-state program to provide insurance for low-income Americans, to the states, with limits on federal funding. House Republicans have proposed a similar concept in their budgets as a way to save money and encourage innovation at the state level, but progressives strongly oppose it and argue that it would “dramatically cut Medicaid coverage,” as Jost put it. [Bloomberg, 8/18/15]

The Huffington Post: Walker's ACA Replacement Would “Almost Certainly Leave People Far More Exposed To Crippling Medical Bills.” On August 18, The Huffington Post's Jeffrey Young and Jonathan Cohn explained that Walker's plan “would almost certainly leave people far more exposed to crippling medical bills,” and would benefit middle- and upper-class Americans, while making low-income and older Americans, and those with preexisting conditions more vulnerable to losing comprehensive coverage: 

By rolling back Obamacare's new spending and regulation, both of which Republicans oppose on ideological principle, any GOP “replacement” proposals would almost certainly leave people far more exposed to crippling medical bills. That's true for Walker's plan and for those touted by his rival candidates within the party.

[...]

What sort of effects would a plan like this have? It seems safe to assume that insurers would start charging older Americans much higher premiums for comprehensive coverage, or simply stop offering such policies altogether. Younger and healthier people could go back to buying the type of cheap, skimpy policies that many had before Obamacare. But others would lose the comprehensive coverage they have now, leaving them exposed to higher medical expenses.

[...]

This would tend to work out well for some middle- and upper-income people, because right now they don't qualify for much -- or any -- financial assistance for the government. But less affluent people would lose assistance, to the point that large numbers of Americans would no longer be able to afford comprehensive coverage at all, and those who could afford it would face much more punishing bills. [The Huffington Post, 8/18/15]

Yet Conservative Media Are Hailing Walker's Proposal As “Well-Conceived” And “Promising”

Charles Krauthammer: Walker's Health Care Plan Is A “Very Good Alternative.”  On the August 18 edition of Fox News' Special Report, Charles Krauthammer called the age-based tax credits “smart” and argued that under Walker's plan, people could purchase catastrophic insurance with tax credits and use health savings accounts to pay for everything else:

KRAUTHAMMER: Look, I think in both of them, particularly in the Walker plan, the idea is that you take people who don't have the coverage through their employment and who today get no subsidies, what you do is you give them a tax credit for which to buy catastrophic insurance. And the smart element of this is that you index it to age, because that's how insurance companies determine how much you pay in a premium. And what you'll get is essentially enough to give you a plan that will cover you for catastrophic, and then for the out-of-pocket stuff, what you do is you revive and you expand health savings accounts, which means it's money you put away. It's going to be huge, up to $12,000 for a family. So you're covering the huge cost if you have a real terrible accident or incident. You also have a way of covering tax-free your expenses for the usual expenses and medicine. Where you save, and it's not really magical, Ron, where you save is you don't have to have these enormous subsidies from the federal government that you have in Obamacare because the federal government imposes all kinds of coverage mandates like contraception and other stuff that the government leaves up to you and your doctor. So I think it does -- it's a very good alternative, and it is a criticism of the House and Senate leadership that they haven't presented a plan like this having been in office now for about 8 or 9 months. [Fox News, Special Report, 8/18/15]

National Review Editorial Board: Walker's Plan Is “The Best, To Date, From The 2016 Field.” The National Review editorial board lauded Walker's plan on August 18 for “tak[ing] a scythe” to the ACA's regulations. They praise the plan as “the best, to date, from the 2016 field”:

Obamacare's two main political strengths have been that it provides coverage to a lot of people who lacked the income to get it, and that it protects sick people from facing discrimination by insurers. Walker's plan shows that these benefits need not be tied to Obamacare's intrusive regulations and taxes. We have reason to think that roughly as many people would get coverage under Walker's plan as under Obamacare. Some of that coverage will be less comprehensive, but much of it will be cheaper and provide more financial protection.

[...]

Walker's plan draws on the best conservative thinking on health care and suggests that the party is in the process of building a consensus. It is very similar to plans that already have the support of the chairmen of the Senate Finance Committee and the House Budget Committee. Senator Marco Rubio has advanced similar ideas in outline form as well. Walker has presented the best plan yet from a presidential candidate, and we hope that other candidates will feel no compunction about copying him. [National Review, 8/18/15]

The Wall Street Journal: Walker's Plan Is "Realistic And Promising Reform." The Wall Street Journal editorial board praised the proposal August 18 writing, “Scott Walker offers a realistic and promising reform” and that “Mr. Walker has laid down an important and realistic marker in what promises to be a robust debate.”

The value of Mr. Walker's credit--ranging from $900 to $3,000--rises with age as a rough proxy for health status and therefore medical expenses. This is an important change from ObamaCare's income-based subsidies. As they phase out, income-based subsidies create high marginal tax rates on the next dollar of income that contribute to a poverty trap. A universal credit is fairer and smooths out these labor-market distortions.

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Befitting a Governor, Mr. Walker demonstrates innovative thinking on Medicaid in particular. Like other Republicans, he favors block grants and more flexibility for states to manage the problem. But he would also reorganize Medicaid to target poor women and children, the disabled and low-income seniors with acute long-term health problems. Everybody else would be moved out of the Medicaid ghetto and receive the same tax credits as the general population. Mr. Walker engineered a similar coverage conversion in the Badger State under ObamaCare. [The Wall Street Journal, 8/18/15]

National Review's Yuval Levin: Walker's Proposal Is “Substantively and Politically Serious.” On August 18, National Review's Yuval Levin wrote that Walker's proposal was “the most substantively and politically serious conservative health care reform we have yet,” and would make the health care system “more market oriented (and thereby also more functional).” He praised the plan for making healthcare more fair and “set[ting] the bar for conservative health reform very high”:

I think it's the most substantively and politically serious conservative health care reform we have yet seen from a presidential candidate, and hopefully it will spur some more to come.

[...]

Taking in the repeal and replace elements of the proposal, this approach would amount to an enormous tax cut, would dramatically improve the market orientation of the health care system not only compared to Obamacare (which isn't saying much) but also to the pre-Obamacare system, and would restrain health costs while giving people more options. It would also, if scores of comparable proposals are any guide, achieve levels of insurance coverage comparable to Obamacare. If Obamacare, which is projected to leave about 30 million people uninsured, can be called “universal coverage” then this kind of approach could too, at a far lower cost and without the heavy taxes, burdensome and constitutionally dubious mandates, or costly regulations. [National Review, 8/18/15]

CNBC's Larry Kudlow: Walker's Plan Is “Strong Health Reform.” On August 18, CNBC senior contributor Larry Kudlow called Walker's plan “Strong health reform”:

Strong health reform @GovWalker @WSJopinion http://t.co/nMZurWgi7q @batchelorshow Joe Rago @WSJopinion @larry_kudlow

-- Larry Kudlow (@larry_kudlow) August 19, 2015

[Twitter, 8/18/15]

The Federalist: Health Care Proposal Is “Well-Conceived.” The Federalist wrote on August 18 that Walker “became the first top-tier Republican presidential candidate to propose a concrete, viable alternative to Obamacare's 2,400 pages of federal largess” and called it "well-conceived across the board:

This morning, [Walker] became the first top-tier Republican presidential candidate to propose a concrete, viable alternative to Obamacare's 2,400 pages of federal largess.  No one did so in 2011 or 2012, and no one had yet done so in 2015.  Now that has changed.

Walker's alternative to Obamacare is well-conceived across the board.  It would lower costs, secure liberty, and make it possible for anyone who wants health insurance to be able to get it.  It would repeal Obamacare's unprecedented individual mandate, its employer mandate, its coverage requirements, its abortion funding, its centralization and consolidation of power and money in Washington.  In fact, it would repeal every last word of President Obama's signature legislation. [The Federalist, 8/18/15]