Republican Plans to Replace Obamacare Have a Problem: House Republicans
A dilemma facing Republican presidential candidates who want to repeal Obamacare is how to care for people with preexisting conditions. While polls show that the law isn't popular, Americans also don't want to return to an era where they can be denied coverage due to an illness.
The solution, according to many Republican presidential candidates, is high-risk pools. To cover the most needy people who would be locked out of the insurance market, they propose sending money to the states.
But there's a major problem with this idea: Republicans in Congress have refused to spend even a fraction of the money that conservative experts say is necessary to make the plan work. In fact, a 2013 attempt by House Republican leaders to fund high-risk pools went down in flames.
Campaign trail trend
Wisconsin Governor Scott Walker rolled out his Obamacare alternative Tuesday. It would "provide funds to states to help provide coverage to those with pre-existing medical conditions" through high-risk pools. In an op-ed Monday, Florida Senator Rubio reiterated his support for "federally-supported, actuarially-sound and state-based high risk pools." The idea has also been embraced by Louisiana Governor Bobby Jindal and Carly Fiorina.
"It's not a new thing," said Douglas Holtz-Eakin, a conservative policy expert who runs American Action Forum. "It takes money, more than anything else. This is a way to subsidize very expensive people."
A 2010 paper by conservative health-policy experts James Capretta and Tom Miller in National Affairs estimated that it would cost $15 to $20 billion per year for a "comprehensive set of high-risk pool programs" aimed at covering between 2 and 4 million people. Five years later, Miller calls that a "high-end estimate," while Holtz-Eakin says it "sounds about right."
That adds up to $150 billion or more over a decade—hardly chump change.
When House Republicans tried, and failed
In 2013, then-House Majority Leader Eric Cantor attempted to pass a bill that stripped $3.6 billion from a wellness fund in Obamacare to instead spend on high-risk pools. Cantor canceled the vote at the last minute in the face of strong opposition from conservative lawmakers. At the time, his office promised to bring up the bill again, but that never happened.
"Subsidizing health care is not what Republicans should be about," Representative Raul Labrador, an Idaho Republican, said at the time. "Republicans should be about managing health care" and lowering costs.
Miller acknowledges this problem. "A lot of Republican proposals have not put as much money in as I think is necessary, and it makes the proposals a little bit less credible and robust," he said. AshLee Strong, a spokeswoman for Walker, wouldn't offer a cost estimate for his high-risk pool plan, saying only he'd "work with Congress to determine how much funding would be appropriate." Jindal's plan puts the figure at $100 billion. A Rubio spokesman didn't respond to a message asking how much he wants to spend.
The problem would, of course, be further compounded if Republicans get their way and repeal the $1 trillion in new taxes on predominantly upper incomes under Obamacare.
Can it work at all?
Some experts believe the concept is inherently unworkable—a recent paper in the Commonwealth Fund said high-risk pools are "prohibitively expensive" for states and customers and don't offer good coverage. Before Obamacare was enacted, high-risk pools operated in 20 states faced very low enrollment—a total of some 200,000 people—and were underfunded, leaving millions uncovered, according to the Kaiser Family Foundation.
"High risk pools can be effective, but only if they are adequately funded so the insurance is comprehensive and the premiums people have to pay aren’t hugely expensive," said Larry Levitt, a health policy expert at the Kaiser Family Foundation. "Even with adequate funding, there would need to be additional government subsidies for low-income people with pre-existing conditions to be able to afford the coverage."
A tall order. Miller holds out hope that a potential Republican president in 2017 will find a way to get it through Congress.
"Times change. What's an adamant position becomes less viable over time," Miller said. "There aren't any miracles out there so you're grudgingly going to have to make some compromises to get something. There's no easy answer."