Wisconsin Governor Scott Walker has unveiled his “Day One Patient Freedom Plan,” a replacement for ObamaCare, which he says he would repeal in its entirety. The centerpiece of Walker’s plan is to restore market competition without entirely removing subsidies for health insurance coverage.
He would provide a refundable tax credit, scaled according to each citizen’s age, and let them go shopping in an interstate insurance market free of ObamaCare’s expensive regulation and market deformations.
Walker sees insurance premiums dropping by at least 25 percent after ObamaCare’s maze of regulations is swept away – an expensive, convoluted regulatory regime he sees as serving the needs of Washington, not hard-working families. “This backwards approach drove up health care costs and reduced access to medical care for too many of our neighbors, friends, and family members,” Walker writes.
He wants to shift regulatory authority for health insurance to state governments, breaking up the bloated and hideously inept top-down bureaucracy ObamaCare established in Washington. He praises the “flexibility” this would give state governments to craft rules supported by their constituents. It’s not expressly stated in Walker’s plan, but that flexibility could also translate to competition between states, extending the power of market competition into the regulatory sphere. Customers in some states may admire the regulations pioneered in others… or envy their less expensive, less regulated, more efficient systems.
After removing the foolish restrictions that prevent insurance companies from competing across state lines, Walker’s plan would extend tax credits to everyone who lacks employer-provided health insurance. “Most Americans today get good health insurance through their employer, and they would like to keep what they have,” he accurately notes.
For the rest, a refundable tax credit that increases with age would be provided – $900 for teenagers, $1200 for ages 18-34, $2100 for ages 35-49, and $3000 for those 50 and older.
“The tax credits would put money directly in consumers’ pockets to use as they shop for the health care plan that works best for them,” Walker argues. “Unlike ObamaCare policies that give subsidies to insurance companies, these tax credits belong to consumers. They would enable individuals and families to quickly and easily evaluate their options and make informed choices about their own health care.”
Presumably Walker would bank on competition from insurance providers to craft affordable plans that compete for those subsidy dollars, reversing ObamaCare’s practice of creating direct cash pipelines from the Treasury to giant insurance companies, and penalizing the young and healthy by sticking them with exorbitant premiums they are forced to pay at gunpoint.
His plan also throws in a $1,000 tax credit for those who establish Health Savings Accounts, where they would be able to save money tax-free for their medical needs – a welcome feature for those who have been sucker-punched by ObamaCare’s gigantic deductibles.
Walker says his plan would encourage individual-market consumers to further drive down prices by shopping as groups. This could also resolve the tensions between ObamaCare’s draconian requirements and individual liberty. It’s probably no coincidence that Walker specifically mentions “religious groups” as one example of a buyer’s pool. Further cost control would come from reforms designed to limit excessive litigation, reducing the legal cost of medical practice, and expensive “defensive medicine” employed more to minimize legal liability than illness.
The Governor notes that a great deal of ObamaCare’s “expanded insurance coverage” actually involved funneling people into Medicaid, an outright welfare program that was in terrible shape before millions of new applicants were added by the “Affordable Care Act.” ObamaCare was, in the main, a fabulously expensive bait-and-switch Medicaid expansion disguised as private insurance reform.
Walker proposes breaking Medicaid into several more focused programs more directly controlled by the states, and funded by specific federal grants, rather than the current practice of matching funds. It seems as if he wants to take a close look at long-term disability programs and their eligibility standards – it’s simply astounding how many more Americans have become long-term disabled since Barack Obama got his hands on the U.S. workforce. Presumably he would strive to trim Medicaid enrollment back to levels more closely approaching the pre-ObamaCare era, or even lower, since he notes that Medicaid’s fiscal future was quite grim even before the ACA came along. An important goal of his tax-credit system would be moving more people away from Medicaid and into competitive private plans.
Walker is adamant that his plan would cost far less than ObamaCare – in fact, he promises his plan would reduce taxes, employ no Obama-style budget tricks, and “compared to the realities that existed before ObamaCare, would not add to the deficit.”
ObamaCare apologists, who of course cared absolutely nothing for the deficit when they were pushing their big power grab through, magically transform into deficit hawks when repeal is discussed… because the gigantic tax increases they lied furiously to conceal during ObamaCare’s passage would supposedly cause huge budget problems when they are repealed. Walker promises to repeal the trillion dollars in ObamaCare taxes, and even add more tax relief besides.
“This is what we did in Wisconsin,” writes Walker, anticipating a likely course of criticism that his plan makes unrealistic cost and savings assumptions. “We rejected the false-choice narrative between raising taxes and austerity, and instead enacted bold reforms.” He cites the success of the reforms implemented in Wisconsin, and pledges to bring that success to the entire nation.
It didn’t take long for the first critique of Walker’s plan to arrive. “In a health care plan that is light on specifics, Governor Walker endorsed the fundamental underpinning of Obamacare – the notion that America needs another entitlement program,” declared Louisiana governor Bobby Jindal.
“In Governor Walker’s plan, a new entitlement is created for every single American human being from the time they are born right up until they grow old and become eligible for Medicare. It is frankly shocking that a Republican candidate for President would author a cradle to grave plan like this,” said Jindal.
While he conceded there were “good features in Governor Walker’s plan,” Jindal accused his rival of taking “the bait laid out for him” by President Obama, and accepting “the notion that we need a new federal government entitlement program, and now he is merely quibbling over the details.” He went on to accuse Walker of essentially trying to deliver ObamaCare at a discount, instead of “standing on free market principles.”
Jindal notes that he put together his own ObamaCare repeal plan long ago – April 2014, to be exact. Jindal’s Freedom and Empowerment Plan actually has quite a bit in common with Walker’s proposal (presumably those are the “good features” in the Walker plan Governor Jindal was referring to.) It also envisions a less-regulated nationwide insurance market with greater competition, reforms Medicaid, moves able-bodied people from Medicaid into the private insurance market, seeks cost savings through litigation reform, and shifts regulatory power from Washington to the states. Jindal was more explicit in his plan about recommending the benefits of competition between political bodies, reducing regulatory cost and increasing efficiency by getting state governments to compete with each other.
One of the key differences between the two plans is that Jindal disliked the refundable tax credits Walker relies so heavily upon, seeing them as a thinly-disguised form of middle-class welfare dependency – even prosperous working people would be unable to afford insurance without Uncle Sam giving them a hand – and fearing they would be prone to abuse. Jindal preferred to separate the truly impoverished and address their insurance needs with price-supported plans administered by the states, bringing everyone else together into a freer, cheaper, more customer-friendly national marketplace. He believes devoutly in the power of market competition to make insurance so affordable that middle-class workers won’t need handouts to afford it. (Of course, Jindal’s plan would be savaged by the Left as throwing everyone to the free-market wolves to fend for themselves, while Walker says his tax-credit idea would make the transition to his system more difficult to criticize on such grounds.)
This is a healthy debate, and the contributions of both Governors Walker and Jindal are most welcome. Polls permitting, maybe they’ll have a chance to hold that debate face-to-face on a stage soon, along with the other Republican contenders and their reform proposals.