Republicans have offered far more political rhetoric than actual policy proposals over the past two years. They have appeared to spend more energy opposing President Obama than suggesting solutions to our country’s challenges. Since Republicans have taken control of the House, however, they have put forward more concrete ideas. Chief among them is the “Roadmap for America’s Future,” advanced by Rep. Paul Ryan of Wisconsin. The Roadmap is indeed a concrete proposal, though it is far from a good idea.
The Roadmap for America’s Future includes all kinds of problematic economic policy ideas, but the healthcare provisions are especially frightening. The Roadmap would shift the burden of healthcare costs onto the most vulnerable people and would force more people to fend for themselves on the private insurance market. Moreover, it does not include the important insurance industry reforms that are included in the new healthcare law nearly a year ago (the Patient Protection and Affordable Care Act). The new law includes reforms designed to hold insurance companies accountable and work at lowering healthcare costs over the long-term. The Roadmap does not.
Here are some of the problems with the Roadmap in more detail:
- The Roadmap would move us away from employer-sponsored health coverage. All taxpayers would instead receive a federal tax credit ($2,300 for individuals, $5,700 for families) to purchase health insurance. Many employers would likely stop providing health benefits, meaning that people would be responsible for purchasing coverage on the private market. This would drive up premiums for older, less healthy individuals. Moreover, these tax credits would not increase as fast as healthcare costs, meaning that they would be worth less and less over time.
- The Roadmap would leave people with pre-existing conditions out to dry. The plan relies on “high-risk pools”: state-based collectives through which people can purchase insurance if they can’t purchase it on the private market. In the current employer-sponsored healthcare system, sick people and healthy people are “pooled” together to purchase insurance, which keeps premiums reasonable for all. In the high-risk pools, sick people would all be purchasing insurance together, which would mean higher premiums for those people.
- The Roadmap would end Medicare as we know it, transforming it into a voucher program. For those enrolling in 2021 or later, Medicare would provide a voucher for individuals to purchase their own insurance on the private market. Insurance companies would be free to charge elderly consumers as much as they like, and there would be no requirements about what benefits they must provide. Just like the tax credits above, these would not grow enough to keep pace with increasing healthcare costs, so elderly people would be stuck with a growing share of healthcare costs over time.
- Finally, the Roadmap would not do anything to significantly lower healthcare costs over the long-term. The growing cost of healthcare is perhaps the biggest threat to our national fiscal sustainability. The Roadmap does not address these rising costs, but merely shifts the costs to individuals.
Now, compare these with what the healthcare law is already doing for us:
- Expanding healthcare to millions who could not afford it previously.
- Implementing important reforms to hold insurance companies accountable, including prohibiting them from denying coverage because of pre-existing conditions.
- Establishing mechanisms to control the growth of healthcare costs over the long-term.
These are the kind of solutions we need, not a misguided “Roadmap” that would lead us back to the days when healthcare was beyond the reach of too many people.