For people who’ve been paying attention, it pretty much goes without saying that the healthcare “reform” proposals by Republican presidential candidates Marco Rubio and Scott Walker would hurt the poor and help the wealthy. That’s what they do, they’re Republicans. But not everyone has been paying attention, and not everyone is aware of how much Obamacare has actually done to level the economic playing field, at least in health care. So it’s definitely worth taking a look at what repealing that law would mean, and the New York Times’s Margot Sanger-Katz did just that.
One of Obamacare’s main effects has been to redistribute income. The law taxes wages, health insurance and medical devices, and raises insurance prices for wealthy, healthy people. It uses the money to subsidize insurance for people who are poor or whose health history made them poor insurance risks in the old system. As my colleague Kevin Quealy and I wrote last year, the law has had the effect of pushing back against income inequality. In addition to lowering the cost of buying insurance, federal dollars also reduce the out-of-pocket costs that low-income Americans now pay when they use those plans. […]Governor Walker’s plan appears to be less generous for many poor Americans. It would roll back the Medicaid expansion that has provided free insurance to low-income adults. It would distribute tax credits to those with private coverage on the basis of age, not income. […] [F]or people without a lot to spend on insurance, a comprehensive health plan may slip back out of reach. For others, an affordable plan might be so bare-bones that it wouldn’t kick in before a major health catastrophe.
Wealthier people, on the other hand, could fare better under this plan, as long as they’re healthy. They would get more federal money to buy insurance plans, and they would have the choice of buying cheaper, less comprehensive plans than those offered under Obamacare rules.
The Rubio plan, less detailed than Walker’s since it’s just an op-ed rather than a white paper, would do the same—provide some sort of tax credit for health insurance. But what it would also do is sweep away everything existing in Obamacare—all of the regulations that help keep prices down for the not-rich. That includes ending lifetime caps for how much insurance companies will pay out to keep you covered, or the provision that lets adult children stay on family plans up to age 26, or requiring all plans provide for preventive care services without any additional copays from patients. All of these things help keep healthcare costs down. The idea of getting rid of it all, as Sanger-Katz explains it, is that “[w]ithout all the rules, and without as many sick people in the system, insurance would be expected to become less expensive, and perhaps more inventive.” The problem is that we’ve tried that already, in the pre-Obamacare system. It didn’t work.
When you factor the massive cuts all Republican plans would make to Medicaid and the inevitable cuts that Medicare would experience once privatized (in Rubio’s plan and the Republican House budget), the hit to low- and moderate-income people is even bigger. That’s a feature, not a bug, in these Republican plans. Because, after all, there’s always the emergency room for those people.