Good news, fans of the interminable Obamacare Wars: there’s a new/old Republican “replacement” plan to fight over. As part of the Republican campaign to convince the Supreme Court that they should go ahead and destroy the Affordable Care Act for no good reason, Orrin Hatch, Richard Burr, and Fred Upton have unveiled their own legislative framework for repealing and replacing Obamacare. The Hatch-Burr-Upton plan is an “updated version” of the plan Hatch, Burr, and former Sen. Tom Coburn released last January to great fanfare.
The old plan was widely praised as a “serious” effort that demonstrated conclusively that Republicans have ideas when it comes to healthcare reform and were finally ready to start the conversation about reforming the healthcare system. That conversation didn’t go very far, so they’re putting the plan out again (with a few tweaks) as reminder to the world of how serious and ready they are. Republicans never coalesced around Hatch-Burr-Coburn, and they’re not likely to coalesce around Hatch-Burr-Upton, mainly because the plan commits a number of heresies.
Conservatives are famous for enthusiastically allowing the perfect become the enemy of the slightly-less-than-perfect, and the Hatch-Burr-Upton plan is very far from the mythic conservative ideal. As Paul Waldman ably documents at the Washington Post, the plan is basically a stripped-down version of Obamacare. It retains some of Obamacare’s most popular features – federal subsidies to purchase insurance, allowing children to stay on their parents’ insurance plans until age 26, guaranteed coverage for people with preexisting conditions – but tweaks them to make them less effective. The subsidies are less generous, states can opt out of the provision allowing kids to stay on their parents’ plans, and you can’t be discriminated against for a preexisting condition so long as you maintain continuous health coverage. The Hatch-Burr-Upton plan is probably less expensive than the Affordable Care Act, but will almost certainly cover fewer people and have wider cracks for people to fall through.
But conservatives in Congress tend not to care about whether a healthcare reform plan actually helps increase access to coverage. What they mainly care about is a) “does this raise taxes?” and b) “is this at all like Obamacare?” And the Hatch-Burr-Upton plan can’t answer either question with a definitive “no.” The authors of the plan boast that they’re getting rid of all of Obamacare’s punishing tax hikes, and propose doing this instead:
To help lower the cost of health coverage, our proposal takes a measured step to reduce a distortion in the tax code—the unlimited exclusion from a worker’s taxes of employer-provided health coverage. This step is necessary and important because economists across the political spectrum largely agree that the current distortion in the tax code helps to artificially inflate the growth in health care costs.
This is a long-winded way of saying “taxing employer-provided health benefits above a certain level.” They set that level high ($12,000 for individual plans, $30,000 for families), but they’re still exposing previously untaxed benefits to taxation, and the closest the authors come to copping to that fact is when they describe it as “certainly fairer than Obamacare,” referring to the ACA’s so-called “Cadillac tax” on expensive health plans. There’s nothing wrong with this policy per se, but if you’re a conservative who considers capping a tax exclusion to be a “tax hike,” well then you’re probably going to have a problem with this, which is likely why the New York Times described it as “a potentially explosive proposal.”
Just in the last week we’ve seen Republicans inside and outside of Congress affirm their opposition to any sort of tax increase as part of the party’s efforts on healthcare reform. Republicans in the House of Representatives passed a bill instructing committee chairs to come up with health reform provisions that meet certain criteria, one of which is that they may not “increase the tax burden on Americans.” Louisiana governor Bobby Jindal, author of his own Obamacare “replacement,” wrote an Op-Ed this week mocking Republicans in Washington for backing an “Obamacare Lite” plan: “This puts Republicans in the positions of being ‘cheap’ Democrats, or Democrat-lite. We’ll raise taxes — but just … less than Obamacare.”
A number of people will argue that Republicans don’t actually have to unite around a plan – they just have to look like they have a plan so the conservatives on the Supreme Court will be incentivized to rule against the government in King v. Burwell and precipitate the ACA’s demise. “The point of the proposal is not for it to be the plan, but for it to be a plan, hopefully one among many,” Peter Suderman writes at Reason. Some conservatives are optimistic that, with the ACA’s future imperiled by King v. Burwell, the GOP will finally get past the infighting and unite around a plan like Hatch-Burr-Upton. “Republicans have been justly criticized for not coalescing around a plan. This may very well be the moment that forces their hand,” Avik Roy writes.
Eh. Perhaps? It’s not like the GOP hasn’t been in this position before, with the Supreme Court threatening to destroy the ACA. And the party hasn’t exactly demonstrated a talent for suppressing internal division in pursuit of shared political gain. But maybe this time will be different. After all, they were “serious” about it last year, so must be even more “serious” about it now.