Roadblock to Health Care Reform

Analysis: 2009 GOP health care proposal illustrates the challenges in unifying Republicans

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Despite the Obama administration’s declaration of victory in the Obamacare Wars, Republicans still vehemently oppose the law. House Republicans have voted to repeal the law scores of times, top Republican leaders are calling the law a “disaster” and a “catastrophic failure,” and Republicans are expected to campaign heavily on the law’s flaws in this fall’s midterm elections.

However, the GOP has yet to unify behind a replacement to the law, despite calls from Republican lawmakers for the party to put forward a viable alternative.

An analysis of the last significant proposal by Republicans to be endorsed by the Republican leadership and receive a vote from the full House of Representatives shows why the party is having such trouble formulating an alternative.

Then-Minority Leader John Boehner (R., Ohio) introduced an alternative to the Democratic proposal in November 2009, titled the “Common Sense Health Care Reform and Affordability Act.” The bill represents what kind of alternative Republicans could unify behind at that time.

The Boehner plan allowed people to buy insurance from other states and medical malpractice lawsuit reform. It also included money to bolster high-risk pools in the states to cover people with pre-existing conditions, financial incentives for states to drive down insurance premiums and decrease the number of uninsured, and rules increasing the flexibility of tax-advantaged Health Savings Accounts, or HSA’s.

The 2009 proposal was a modest plan that made incremental improvements to the health care system in America at that time, said Merrill Matthews, a health policy expert at the Institute for Policy Innovation. He thought that, while flawed, the proposal could form the foundation for a new proposal now.

Lanhee Chen, a health policy expert at the Hoover Institution and the policy director for Mitt Romney’s presidential campaign, agreed with that suggestion.

“I do think there is a lot in that proposal that is a useful guide as Republicans think about how to replace Obamacare,” he said.

The plan makes small changes that would drive down the price of insurance for some people, especially in the small group and individual markets. The Congressional Budget Office’s (CBO) analysis of the program projected that it would lower insurance premiums by 7 to 10 percent for the small group market and 5 to 8 percent for the individual market.

The plan would not decrease the number of people without insurance by much, the CBO said. It projected only three million more people would get insurance under the plan, leaving 52 million uninsured.

Chen contended that Republicans were right to focus on driving down costs in 2009 instead of the number of uninsured—and they should do the same now.

Basing a reform around the goal of reducing the number of uninsured is using the wrong metric of success, Chen said. Instead, Republicans should focus on driving down cost so more people can purchase insurance with their current means.

The media’s focus on the number of uninsured creates a messaging challenge for this kind of approach, though. “Republicans have to be careful as they’re proposing these alternatives to try to reframe the debate a little bit,” Chen said.

Other experts contended that the 2009 plan is inadequate given the new insurance environment created by Obamacare.

“For both substantive and political reasons, Republicans ought to aim their sights higher,” said Ramesh Ponnuru, a domestic policy expert and senior editor at National Review. Repealing Obamacare and implementing the 2009 reform today would result in millions of people losing insurance coverage—making the plan an untenable option, he said.

The 2009 plan left out two areas that many conservative experts argue should be incorporated into any reform today: the tax code and Medicare. Republicans have largely coalesced around Rep. Paul Ryan’s (R., Wis.) Medicare reform plan, Chen said.

However, the tax code remains, and reforming it should be at the heart of any Republican proposal today, Ponnuru and others said.

“I think it is impossible to have a credible conservative reform of healthcare that does not tackle tax reform,” Ponnuru said. The tax code right now is biased toward people who receive insurance through their employers, making it more expensive for people who do not receive their insurance through their employer to purchase insurance. However, changing this tax structure could disrupt people’s employer-provided insurance.

This challenge is likely one reason why tax code changes were not included in the 2009 plan, Ponnuru said.

Thomas Miller, a healthcare expert at the American Enterprise Institute, said that the tax code is “no longer an untouchable area.”

“We’re in a different environment in 2014,” Miller said. “We need to do more and we need to do different.”

Both Ponnuru and Miller described the Republican Party as divided into two rough camps: one that wants to dramatically overhaul the health care system in America along free-market lines, and another that does not want to alter it too much, if at all.

A good plan has to involve a tax-credit system that both gives people the opportunity to buy insurance if they do not get it through work and does not disrupt the existing coverage, said Jim Capretta, a health policy expert at the Ethics and Public Policy Center.

This approach, while politically necessary, has the potential to fracture the Republican conference, Capretta said.

“Many, many Republicans support that proposal, but some Republicans have a hard time accepting it,” Capretta said.

The 2009 proposal was simply a “lowest common denominator” plan that was designed to unify the conference at that time, Miller said. As a result, it did not contain anything too controversial that could split the party.

But that approach will not work today. To be successful, any Republican plan will have to promise to broaden insurance coverage, Capretta said.

“I don’t think the 2009 plan does enough in that regard, so I don’t think it will be very relevant going forward,” Capretta said.

Andrew Evans   Email Andrew | Full Bio | RSS
Andrew Evans is an assistant editor at National Affairs and a former reporter for the Washington Free Beacon, where he covered government accountability and healthcare issues.