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Presidential hopeful Gov. Scott Walker (R-WI) released the most detailed Obamacare replacement plan among the Republican contenders.
The Walker plan repeals Obamacare and replaces it with a different tax credit–based system. While Obamacare's tax credits are tethered to income (lower earners get more help), Walker's plan would base tax credits on age.
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For high earners, this might be great. Under Walker's plan, Taylor Swift would get $1,200 to help buy coverage because she's 25, while Obamacare would give her nothing on the grounds that she's superrich. For lower-income people, this is a lousy deal: A 25-year-old earning $17,000 at a low-wage job would get a $1,962 credit under Obamacare.
Walker's plan says it would "protect all Americans with pre-existing conditions," but when you read the fine print, you realize that's not accurate. It would only bar preexisting conditions for Americans who have continuous coverage — who never have a lapse between their plans. But there aren't any protections mentioned for people who do drop coverage at some point. This group is big: One study found that between 2004 and 2007, 89 million Americans had at least a one-month gap in coverage.
Walker would cover these people with preexisting condition pools. He writes his plan "would make it easier for states to expand those pools." He does not explain how, exactly, this would work.
For those without preexisting conditions, Walker's plan would take steps to deregulate the individual market. It would no longer require insurance plans to cover a core set of benefits (Obamacare has a set of "essential benefits," including preventive care and pregnancy costs, that insurers must cover). This would likely mean the benefits available to people buying their own coverage would become cheaper — since they cover fewer services — but also less robust.
The Walker plan would turn Medicaid into a block grant program. In its simplest form, turning Medicaid into a "block grant" simply means handing control of the program — and the funding for it — over to the states. Instead of paying a set percentage of each enrollee's bill, the program would pay a specific amount to each state. It would then be up to the states to figure out how to best spend those funds.
In theory, there's nothing about a block grant proposal that commits the government to cutting Medicaid funding. In actuality though, Republican plans to block grant Medicaid universally make significant cuts to the program — cuts that experts say can't just happen by making the program more efficient.
The Kaiser Family Foundation assessed the block grant proposal in Budget Committee Chair Rep. Paul Ryan's 2012 budget and estimated that it would mean between 14 and 20 million fewer people receiving Medicaid by 2022.
A world in which Obamacare is repealed, and the Walker plan enacted, is one in which the individual market is friendlier to higher-income, healthy shoppers — but likely worse for the poor and the sick, both those seeking private coverage and those on Medicaid.
