This summer, Sen. Bill Cassidy (R-LA) and Rep. Pete Sessions (R-TX) introduced the The World’s Greatest Health Care Plan (that is the real name), a bill that aims to replace Affordable Care Act. The bill is among more than a half-dozen Republican proposals on the subject — and this Monday morning, Sen. Cassidy and I got to discuss it in depth.
The Cassidy-Sessions bill has some similarities to other Republican plans: It includes tax credits to make insurance more affordable, with the most generous tax credits going to older Americans who typically face higher premiums. The bill would bar insurers from denying coverage to those with preexisting conditions — although it would allow them to charge higher rates to sick people who don’t maintain continuous coverage.
But there are some interesting ways the Cassidy-Sessions bill stands out from other plans: The one that stood out to me is allowing states to automatically enroll uninsured people into low-cost health plans — putting the onus on the patient to opt out of coverage.
“All those young immortals who are not about to pay through the nose on the exchanges will be automatically signed up,” says Cassidy. “You restore some of the actuarial soundness to the market.”
Cassidy thinks that this automatic enrollment provision would lead to his bill covering more people than Obamacare — although the coverage would be for a smaller set of benefits. And this is a trade-off that lots of Republican plans make: They drive premiums down by ratcheting down what the health plans have to cover.
Cassidy and I discussed his automatic enrollment provision, whether his plan would work for low-income people, and what parts of Obamacare he would consider keeping. What follows is a transcript of our discussion, lightly edited for clarity and length.
Do you consider your health care proposal an Obamacare repeal bill? It does get rid of Obamacare’s individual and employer mandates, but it also lets states keep parts of the law like tax credits and insurance marketplaces.
One of the ironies of Obamacare is that it was ostensibly passed to help working-class families and middle-class families, and they were the ones who voted to put Trump in the presidency. So I think we have to think a bit about why those families [that are] supposedly being benefited by the bill voted for this change. It’s because health care costs have exploded, and the power to make choices about health care was taken away from them.
From my perspective, as a physician who has cared for the uninsured, I see a working-class and middle-class woman who is on therapy for breast cancer, who voted for Trump but does not want to see her care disrupted. But she wants something different. She wants less expensive coverage, without all the bells and whistles.
I am almost agnostic as to what elements of Obamacare are in our plan or not. Except for that, in our plan, we definitely seek to give the patient the power, not the government or a bureaucrat. As opposed to one size fits all, we would turn a lot of the power over to the states, so that they can make decisions about what works for their citizens.
Do you have an expectation for how many people your plan would cover versus Obamacare? Is coverage an important metric to you, or do you think we should be judging plans by, for example, how much they cost instead?
Two things: I think we will cover more people than Obamacare if states make the decision we think they will, and we will do it at a lower cost.
Under our bill, we give states the option of saying that someone who is eligible for coverage is enrolled unless they choose not to be. In Obamacare, someone had to actively make the decision to enroll. In our case, we say the state legislature can decide to let the government enroll people in a default plan.
This is a lot like Medicare Part A [hospital insurance for Americans over 65]. That has been vastly more successful at getting people enrolled than Obamacare. So taking a clue from Medicare Part A, we expect to have more people enrolled in coverage.
We expect it to lower costs, too. Right now, people on the exchanges are paying through the nose. You’ve started to have a pile-on from people who are sick, and that’s what causes a death spiral. If a state elected to have everyone enrolled and if Medicare Part A is a guide, we’ll have 95 percent of people enrolled in coverage. All those young immortals who are not about to pay through the nose on the exchanges will be automatically signed up. You restore some of the actuarial soundness to the market.
The way we do this is we’d have a very standard health insurance policy, which is bare-bones. We would have a standard insurance policy that pairs a catastrophic plan with a pharmacy benefit with a health savings account. If someone does nothing, they would be enrolled in that.
Earlier in our conversation, you were saying one of the problems with Obamacare was the involvement of government bureaucrats, that people don’t get to make their own health care decisions. Do you think automatic enrollment is the same problem — that the government chooses which health plan uninsured people should get?
People don’t complain because they’re automatically enrolled in Medicare Part A. They say, Hey, I’m in, I just went to the emergency room and I’m covered. That’s great.
One other question I have on this automatic enrollment idea — would the idea be to have the tax credit cover the entire premium? Or could people end up paying a premium they didn’t sign up for?
The way we do it is that if somebody is automatically enrolled, the health care tax credit would go automatically into an account. If they do nothing, they would have an HSA and catastrophic policy administered by the financial institution, which would be required to put together a provider network that the person could access if they choose. The credit would be sufficient to pay for that bill.
The credit would vary: My 22-year-old son would have a less generous credit than someone who is older might. The only way the credit varies is based on age and geography.
So this is one of the ways your plan is quite different from Obamacare. The tax credits in your plan only vary by age and geography, but under current law, the lowest-income people get the biggest tax credits. Why give everybody the same level of tax credit if lower-income people might need more help to make insurance affordable?
We think the key feature of this is first dollar coverage. First dollar coverage meaning that someone goes to the doctor and it is at no cost to the individual. Again, I’m coming from a setting where for 30 years I’ve worked with low- or middle-income people. And the most important thing to them is that they have first dollar coverage. They might not have $50 to spend on a copay.
The second thing is that right now, we penalize people for earning more money. Part of Obamacare’s problem is that when people earn more, they get less subsidies. You create a disincentive to earn more. We’re not making this up; everyone knows this.
So if you provide first dollar coverage, and remove the financial penalty that Obamacare has for working more, you create a better system.
[Editor’s note: One fact about the Cassidy-Sessions plan that is helpful to understanding this answer — which I asked in a follow-up email to the senator’s press office — is that it envisions patients putting part of their tax credits toward the monthly premium and part in a health savings account to cover future health care bills. This would allow for the “first dollar” coverage that Sen. Cassidy discusses — where patients could pull from their HSA funds to cover the cost of copays and other fees while still within the deductible.]
So walk me through how your plan would serve someone who is relatively low-income; let’s say they earn around 150 percent of the federal poverty line. This is where a lot of people who currently use the Obamacare marketplaces are.
How would you see them using their tax credit, and why would they be better off than they are now with Obamacare?
That group is not monolithic. The fact they’re at 150 percent of the federal poverty line suggests they are employed. So one thing they could do is take the credit they receive from us and use it to buy into their employer-sponsored insurance. Small businesses and sometimes large ones are increasingly saying we’ll cover our employee, but the employee has to pay for the dependents. And those folks are not currently eligible for the exchanges. [Those with an offer of coverage at work cannot, under the Affordable Care Act, get tax credits on the marketplace.]
Under our plan, they could bring the tax credits to their employer, and that would help pay to cover the dependents. So we’re leveraging private sector dollars and the group market, which has been the only thing that has been stable over the past few years.
What about someone who doesn’t have access to employer-sponsored coverage, like a freelancer or contractor?
They could use their tax credit to get a plan, or could pool with their family members. They could buy a catastrophic plan, or also buy into a richer one. That person would have first dollar coverage if he or she has an illness. Right now, that person might have a $6,000 deductible, which for someone who makes 150 percent of the federal poverty line might as well be $6 million. They don’t have the money. With ours, it’s more generous because people don’t have to pay for the bells and whistles.
One of the things that surprised me about your plan is that you could see states continuing to run insurance marketplaces that Obamacare created. I understood from reading your plan that states would continue to run marketplaces if they wanted, but would you see the federal government still operating Healthcare.gov for any states that might want to use it?
It may be that Californians would vote to keep their exchange; they think it’s working for them, so God bless them. On the other hand, it’s clearly not working for Arizona, and they would probably opt for an alternative. There is a two-step process for repeal. First we pass legislation, and states get to decide whether they want to stay in or out. If they stay in, there would be a cap on how much states could receive. If the law is not working for you, we give you an alternative.
Some of the blue states would want to stay with Obamacare and have their own exchanges. There might be the occasional state that wants to stay on Healthcare.gov. I think that’s a detail that could be worked out in the future.
Can you talk a little bit about where you see agreement in the Republican Party on health policy? And where are the places that you all will have to come to agreement in the coming weeks and months?
First, let’s emphasize there is a lot of common ground between the different plans. Most have tax credits by which people would gain coverage, and the tax credits would flow to the individual instead of the insurance plan. Number two, every plan gives states more power.
One area of difference is that on Medicaid, some want a straight block grant. That is so inferior to the per-beneficiary block grant [where states get a certain amount for each person they cover, rather than a lump sum of funding regardless of how many enroll in coverage]. Some other plans have high-risk pools. I prefer the mechanism we’ve created in which someone is opted in to the system rather than out. I think it’s better to get people in at the start, rather than anticipating people will need help after the fact.