A Swing and a Miss. Scott Walker's Health Care Plan

 

            There’s a lot of invective against the Affordable Care Act in the health care plan Republican presidential candidate Scott Walker released yesterday.  Aside from repealing Obamacare—an objective repeated like a mantra throughout the entire document--it doesn’t seem to know what it wants to accomplish.  And in those rare moments when it does know, it seems to ignore what everyone here in the Tragic Commons accepts as the immutable physics of politics.

            Above all, Walker doesn’t like the idea that Washington should have any influence over the health care choices of ordinary Americans. “Obamacare is just the first part of a broader liberal agenda to remove control from the states and put federal regulators in charge of consumers’ individual health care choices” he writes.

            Heavens!  Pretty soon they’ll be fluoridating our water and making us wear seatbelts.

            Is there a bizzaro America inhabited only by Republican candidates for federal offices and another normal one for the rest of us?  Last time I checked, the only “control” Obamacare had removed from the states or consumers was the freedom to choose whether to buy health insurance at all (and, provided that you are prepared to pay the tax penalty, you still have that choice) and the liberty to pay for a plan that won’t cover the medical services you need when you need them.

            No matter.

            Walker would transfer responsibility for regulating health insurance to the states.  He would give everyone purchasing health insurance outside of an employer-sponsored plan a tax credit based on age instead of on need.  His plan would thus, end the “Obamacare policies that give subsidies to insurance companies,” so that policyholders could pay their own premiums with subsidies they receive through the tax system.  Taxpayers could deposit the portion of any tax credit not used to pay insurance premiums in a tax-free health savings account (“HSA”).

            My wife and I are both 56 and together, we pay over $10,000 every year for “bronze” level policies with high deductibles and co-pays.  Walker’s plan would give us a total of $6,000.  While there obviously wouldn’t be anything left over to deposit in an HSA, the plan offers, as consolation, the fact that “there would be no intrusive oversight by the IRS and no accountant needed to determine the credit.”  Instead there is a simple chart.

            Republicans are always the ones on high guard against inflation, the condition that appears when there are too many dollars chasing too few goods.  That, after all, is why they’re petrified about the low interest rates the Federal Reserve has insisted on since the Great Recession.  Why isn’t Walker worried about health insurance premiums escalating when his plan dumps more money into the health insurance market in the form of tax credits? 

            Presumably, because the tax credits in the chart aren’t indexed for inflation.  Thus, Walker’s tax credits become vouchers that lose value every year, unless Congress has the wherewithal to increase them.  Yep, folks, in a few years, you’ll on your own.

            Oh, and there’s not a word in the plan about how Walker would pay for these tax credits.  Say what you will about Obamacare, at least there is a tax regime that pays for it.  When Walker repeals Obamacare on the first day of his administration, the taxes that pay for Obamacare would disappear as well.

            Walker thinks he can “make health care more efficient, effective, and accountable by empowering the states.”  He says that “State and local leaders are better suited and better prepared to attend to the needs of their citizens than are Washington bureaucrats,” and that “state and local leaders are better equipped than federal bureaucrats to make state and local decisions.” 

            Really?

            Did you notice that people who work on health care matters from desks in Washington are “bureaucrats” while people who work on health care matters from outside of D.C. are “leaders”?  Did Walker forget that he and his fellow Republican governors have largely elected not to establish and control the health care exchanges the Affordable Care Act mandates for every state?  How does he square this argument that “local leaders”  are more attentive to the needs of their citizens with the fact that he and his fellow Republican governors have refused to expand Medicare in their states? 

            Never mind.

            Walker revives the Republican proposal to allow people to purchase health insurance across state lines.  He expects that some states will not have “red tape” as stringent as it may be elsewhere.  Or else, he expects that the lower cost of living in say, Idaho will translate into lower health insurance premiums for people living in, say New York.

            But won’t that just allow the states to create what we call here in the Tragic Commons a “race to the bottom,” where they compete to attract insurance companies by letting them do whatever they want?  How will insurance companies located, in say, Idaho, gain the economic leverage over doctors and hospitals needed to keep costs down, say, New York.  And, if he truly thinks that “local leaders” are best able to address the needs of citizens, how can he justify allowing the Idaho state insurance commissioner to regulate an insurance policy purchased by a resident of the state of New York?

            Republicans have had almost 6 years to work out a sensible alternative to Obamacare.  Walker’s plan is a rehash of Republican thinking on health care, and it makes no sense, basically because it’s trying to address a political objective instead of a real problem. J.D. Power, for example has just published a poll showing that people who are using Obamacare generally like it as much people who get their health insurance through their employers.  And, that’s largely because they think their getting good insurance for a fair price.

            Obamacare is flawed, but the bottom line is that it works.  Now, either come up with something that works just as well, or quit whining about it.