Problems with Walker’s Health Care Plan Extend Far beyond Its Changes to the ACA
The health care plan unveiled this week by Governor Walker would undo many years of progress on improving access to quality, affordable health care. My biggest concern initially was that it would reverse most of the gains made over the last 5 years under the Affordable Care Act (ACA). However, the damage caused by the Governor’s plan would go much further than that, because it would also undo much of the progress that has been made over the last decade or two as many states improved and expanded Medicaid coverage (such as Wisconsin’s creation of BadgerCare in 1999).
Under Walker’s proposal, millions of adults across the country are likely to lose their Medicaid coverage – as states restrict eligibility in response to the elimination of enhanced federal funding for Medicaid expansions. However, the damage wouldn’t stop there. By block granting Medicaid funding, states would almost certainly be compelled to dial back eligibility and the scope of services. Over the next 10 or 20 years, I think the negative consequences of that for access to quality health care would probably exceed the damage done by repealing the ACA.
Governor Walker does acknowledge in his plan that there are aspects of the ACA that should be preserved in some fashion, such as helping people who have preexisting conditions. However, there’s an enormous gap between the rhetorical support for those goals and the capacity of his plan to deliver. Aside from the obvious problem that Walker’s plan is unfunded, here are some of the other ways that it would fail to accomplish several of the significant goals that it aims to achieve:
Inadequate assistance for purchasing plans in the individual marketplace – The Walker plan would make more people eligible for tax credits to help them purchase plans, but that assistance wouldn’t be graduated based on income. The credits he proposes are too small to make private insurance plans affordable for many of the low-income people who are now covered in Marketplace plans and for others who would lose their Medicaid eligibility. In addition to getting much smaller tax credits for premium assistance, people below 250% of the poverty level would lose the other cost-sharing assistance provided by the ACA.
A flawed plan for helping people with preexisting conditions – Although the Governor’s plan purports to help the large segment of Americans with preexisting conditions, it repeals the requirement to cover them and replaces that with a measure only protecting those who maintain continuous coverage. That’s a huge problem because people who are living paycheck to paycheck are often unable to keep up with their premiums, so they move in and out of coverage. That will particularly be a problem under a proposal like Walker’s that substantially reduces tax credits and cost-sharing assistance for low-income adults and sharply reduces Medicaid coverage. Under the Governor’s plan, once someone with a preexisting condition has a break in their coverage they would have no choice other than enrolling in a very expensive high risk pool.
Failing to require insurers to allow young adults to remain on their parents’ coverage – The plan says surprisingly little on this topic, but I believe the Governor has stated that he would give states flexibility to require insurers to cover young adults on their parents’ plans. We need more details on what that would entail, but thus far Walker doesn’t seem to want any federal mandates on insurers. Because federal law – specifically, the Employee Retirement Income Security Act (ERISA) – precludes states from imposing requirements on self-insured plans, state legislation on this topic is an inadequate solution. Unless Walker’s plan would amend ERISA, I think it would be a major step backwards for coverage of young adults via their parents’ insurance (as well as an even bigger step backwards for covering young adults in Medicaid).
But the biggest problem with the Governor’s health care proposal is that there’s no plan to fund it. Walker says he wouldn’t use any taxes or “budget gimmicks” to fund his plan, and he pledges to repeal all the taxes that fund the ACA. In lieu of “gimmicks” and taxes, he says that to offset the cost of his plan, “we would simplify and reform how the federal government helps people access health insurance.”
I think Governor Walker deserves some credit for at least providing a sketchy outline of his health care reform plan and going beyond merely promising to repeal the ACA. But until he discloses how his plan would be funded and he fills in other key details, I would still give him a very low grade for transparency.