Scott Walker's Obamacare Replacement Plan Is Popular With Republicans—But Can It Work?

The GOP White House hopeful is seeking to fulfill a goal that has eluded Republicans for more than five years.

Scott Walker, governor of Wisconsin and 2016 Republican presidential candidate, speaks to attendees at the Iowa State Fair Soapbox in Des Moines, Iowa, U.S., on Monday, Aug. 17, 2015.

Photographer: Andrew Harrer/Bloomberg

Republican presidential candidate Scott Walker stitched together a series of popular conservative health care ideas in his newly unveiled Obamacare replacement plan on Tuesday, seeking to fulfill a goal that has eluded congressional Republicans for more than five years.

"On my very first day as president, I will send legislation to the Congress that will once and for all repeal Obamacare entirely and replace it in a way that puts patients and their families back in charge of their health care decisions," the Wisconsin governor said in a speech at a machine parts company near Minneapolis.

If Walker's rhetoric is familiar, so are his policies. His "Day One Patient Freedom Plan" aims to fulfill a longstanding Republican goal by returning to the pre-Affordable Care Act status quo of 2010, when the current national uninsured rate of 9.2 percent was higher than 16 percent. Though Walker provides more details than his chief Republican rivals, he's notably light on how he would cover the high cost of his proposals.

A centerpiece of his plan is to provide age-based refundable tax credits for people who lack employer-provided coverage.

walker tax credits
Source: Scott Walker campaign

"Walker emphasizes a state-focused, outside of Washington approach; in keeping with the perspective of a Midwestern Republican governor. His plan fits within the established territory of previous proposals like the ones by [Georgia Representative] Tom Price," said Tom Miller, a health policy expert at the conservative American Enterprise Institute.

Tim Jost, a prominent health care expert, said Walker's "tax credits at the level proposed would not begin to cover the cost of decent coverage."

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.

'There is not a new idea in here'

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.

"There is not a new idea in here. Everything is recycled from previous Republican proposals," said Jost, a professor emeritus at Washington and Lee University who supports the ACA. He added that "many of the ideas, like sale of insurance across state lines and preexisting condition high risk pools have been tried and failed."

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.

Walker's plan also calls for reforming medical malpractice laws and encouraging Health Savings Accounts, or HSAs, by raising the limit on tax-free contributions to $6,250 to individuals (and twice that for families).

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."

Notably, Walker's plan does not suggest any changes to Medicare.

'I took on the establishment of my own party'

The popularity of Walker's health care ideas with the right may boost his fortunes in the Republican primary, where he has been sinking in the polls. It's also unclear if his policies would make it through a Republican Congress, which has not attempted to pass an Obamacare replacement yet. Still, he insisted in his Tuesday speech he'd get the job done.

"If you've had it with Obamacare and you want someone who is going to do something about it, I am your candidate," Walker said. "Four years ago, I took on 100,000 protesters, I took on the big government union bosses, I took on the liberal power machine from Washington and, yes, I took on the establishment of my own party to push big, bold reforms. And you know what, we got results."

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