A Bipartisan Plan to 'Repeal and Replace'

Republican Scott Brown and Democrat Ron Wyden have a radical plan to change the health-care law that, according to Max Fisher at Atlantic Wire, could please both proponents and opponents of the reform law. I'm not sure "plan" is quite the right word, though. In section 1332(a) of the Affordable Care Act, change 2017 to 2014. That's it.

As Politico explains, starting in 2017, Section 1332 of ACA already allows states to opt out of the individual mandate and other provisions, and lets them set up alternative arrangements of their own. These alternative schemes would receive the same amount of federal support as before, as long as they satisfied certain restrictions. The new Brown-Wyden "plan" would grant them this freedom three years earlier, in 2014, meaning that they would never have to set up a mandate-based system in the first place. The idea is simple: Let states go their own way from the outset, and we will find out what works best.

Is this "repeal and replace" or, as Ezra Klein calls it in praising the proposal, "compete and succeed"? The answer is both. Remarkable that the 2017 waiver provision attracted so little attention before. Just bringing it forward three years as good as repeals the law--as a plan for reform, even if not as a statement of goals.

Then again, how much competition among states would the change really allow? Everything depends on precisely what the requirements on states turned out to be. Section 1332 sets up the tests that a state plan would have to pass in order to deviate from ACA and still receive federal support:

a) The state waiver ensures that individuals get insurance coverage that is at least as comprehensive as provided under federal law;

b) The state waiver ensures that individuals get insurance coverage that is as affordable (i.e. cost-sharing and protections against out-of-pocket spending) as it would otherwise be under federal law;

c) The state waiver ensures that as many people are covered as under the federal plan; and

d) The state waiver will not increase the federal deficit.

This is all very vague. Comparing two different insurance plans, it is not always obvious which has the more comprehensive coverage, or is more affordable. Must a plan be as affordable for everybody, or just for most people, or just for the poor? Over what time span is the deficit to be no higher, and according to whose forecasts?

Implementing the tests was going to be difficult in 2017--but doing it in 2014 would be even harder. A state repealing the mandate in 2017 would have benchmarks already achieved under the federal plan to measure their new scheme against. A state repealing the mandate in 2014 would not. Who knows how many people would have been covered by the unamended ACA in Ohio, say, if the unamended ACA had never come into effect? Which state plans conformed and which did not would be a matter of fierce dispute.

The principle of allowing states to pursue their own approaches to health-care reform, subject to certain goals being met, is very attractive. By all means let Vermont use this flexibility to do single-payer, and let's see what happens. Then compare the results with those in states preferring market-based solutions. Though, as I say, just how much real state-by-state competition Brown-Wyden by itself would permit is unclear.

What a fascinating proposal. And it's even more interesting that a progressive such as Klein is keen--a sign, no doubt, that Democrats are not much invested in ACA (as opposed to the goals of ACA). Who knew that "repeal and replace" could get bipartisan backing? The idea might actually get somewhere.

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