Darrell Issa, chairman of the House Oversight and Government Affairs Committee, took to Twitter Monday to propose replacing Obamacare with an array of subsidized, state-based, market-driven comprehensive health-insurance options that are not linked to employment and don't penalize people for having pre-existing conditions.
If Issa's replacement ideal sounds a lot like Obamacare, it's because so many components of the Affordable Care Act were based on ideas originally developed on the right. Rebuilding Obamacare based on conservative market principles gets you ... something not that different from Obamacare. Issa's plan would be better than the one passed into law in 2010, he insisted, because it would be based on the Federal Employee Health Benefit Plan. Yet that plan is far more generous to consumers than Obamacare and would likely cost the government more were it extended to the uninsured population as a whole.
Here's what Issa proposed.
Let's take Issa's suggestions piece by piece.
"Use a competitive free-market choice to expand consumer choice"? Check —Obamacare does that through the health-insurance marketplaces that allow consumers to pick from an array of private plans that meet baseline standards. That's what make it different than a single-payer system where the government is the only insurer, the progressive pipe-dream for what health insurance should look like.
"Allow self-employed Americans access to the same type of group coverage available to businesses"? Check — Obamacare does that by creating exchanges where the group is a state government or the feds.
"Include insurance plans in all 50 states"? Check — Obamacare does that, through 17 state-run exchanges and 27 federally run state exchanges. Seven states have "partnership" systems. It's not totally clear from the graphic, but Issa supports the government offering health-insurance plans that are available across state lines. Obamacare does not provide that option.
"Guarantee coverage, regardless of health status, pre-existing conditions or age"? Check, check, check. That's the whole "getting rid of discrimination against people with pre-existing conditions" part of the plan. Obamacare ends at age 65, when people become eligible for Medicare, while the FEHBP plan can be continued for certain eligible employees into retirement. That makes the plan for federal workers a more generous perk than Obamacare. Also, as Josh Barro has pointed out, the FEHBP imposes more restrictions on insurers than Obamacare does, because it requires the same rates for people of all ages, while people who are middle-aged are charged more than the young under Obamacare.
Issa says his plan "Would not: Hurt small businesses with heavy fines and burdens, forcing them to reduce hours, lay off workers and cut benefits." But small businesses — those that employ fewer than 50 people — are already exempt from the mandate to provide insurance under Obamacare, so it's not clear what Issa is talking about here. Instead, Obamacare is supposed to provide those small businesses with tools to make it easier for them to purchase insurance for their employees by setting up marketplaces where they can go to find insurance for them, though the online roll-out of the small-business insurance marketplaces has been delayed.
Issa also says his plan "Would not: Break the federal budget by adding trillions of dollars to the deficit." "[T]his IS the system that members, staff and gov't officials use & it's a proven, low-cost model," Issa insisted.
But the only reason FEHBP is "low-cost" to consumers is that the federal government, as an employer, picks up about 75 percent of the premium tab for whatever insurance people pick through the system, according to the Office of Personnel Management.
In fact, the debate in Congress right now over whether or not there will be what Republicans are calling "special breaks" for Congress under Obamacare is really about whether or not congressional staffers will continue to get an employer subsidy once they move into Obamacare — a system designed for people who lack insurance or who are already in the individual market, and which provides no subsidy for people who can get insurance through their employers or to those who earn as much as many congressional staffers.
The FEHBP is a far more generous plan than Obamacare when it comes to federal subsidies. Obamacare only provides subsidies for people who earn between 200 and 400 percent of the poverty level — $22,980 to $45,960 for an individual in 2013 — whereas the plan Issa cites as a model provides subsidies even for those earning the congressional staffer salary maximum of $172,500. It's unclear whether Issa supports those subsidies or not.
The Federal Health Employee Benefit Facts from the Office of Personnel Management makes this clear. "What Does the Federal Employees Health Benefits (FEHB) Program Offer?" the brochure asks. The second item on the list is "A Government contribution toward the cost of your plan."
It seems unlikely this would be true if the FEHBP, which covers 8.2 million people, were expanded to cover the additional 25 million expected to have access to insurance through the Obamacare exchanges by 2023, if only because more people insured through a government program means more government workers needed to manage it.
And it's not the case that the FEHBP will keep your private information out of the government's hands — it's designed as a plan for people who by definition have already given a great deal of personal information to the government, including for tax purposes, since the government is the one paying them (or their spouse or parent). Indeed, the IRS is already involved in the FEHBP through Section 125 of the Internal Revenue Code, which allows government workers to use pre-tax dollars to pay for insurance premiums.
That might be a nice bonus feature to have in the Obamacare exchanges one day, but for it to work it would almost certainly require people to provide at least as much information to the IRS as they do under Obamacare. Users also have to hand over data to take advantage of a feature of FEHBP that makes salary deductions available for premiums — a feature not included in Obamacare.
There is almost no way to get the government both more involved and less involved in creating options for health-insurance delivery at the same time.
FEHBP was the basis for Democratic presidential candidate John Kerry's 2004 health-care-overhaul plan — he proposed allowing all Americans to join it — and an early version of what became Obamacare. But Kerry, as we all recall, did not win the 2004 election, and the existing ACA is the program that was able to pass after pressure from centrists and the insurance industry. Had Republicans supported a plan of this sort in 2009 and 2010, it's possible we'd have it now. Instead, we have Obamacare and a government that's been shut down by Republicans in a bid to destroy it.
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