Walker’s Health Plan and Its Mistaken Critics

by Ramesh Ponnuru

Jonathan Chait and Kevin Drum have offered criticisms of Walker’s, and to a lesser extent Rubio’s, health-care plans from the Left—criticisms that seem to me either to lack perspective or misunderstand the plan.

1) Walker and Rubio’s plans are “not so much plans as skeletal descriptions of planlike concepts,” says Chait. They have an “extreme lack of detail.” I’d like more detail, too, but Walker’s description is reasonably detailed for this stage of the campaign. It compares well to this document from Obama’s 2008 campaign, which was obviously incomplete (and also pretty different from the law Obama eventually signed).

2) Drum says he would expect Walker “to explain pretty carefully” how the plan can work without adding to the deficit, and he doesn’t. Walker says he is going to reform the tax break for employer-provided plans and get savings out of Medicaid. He doesn’t specify the numbers in either case, or the proportions, but there’s no reason to doubt that some such mix could be made to work. (Avik Roy notes that Walker’s problem is a lot bigger if you assume that he would reverse rather than replace Obamacare’s Medicare cuts. Republicans have generally favored replacing them, but we’ll know more when Walker makes his Medicare proposal.)

3) Chait says Walker would let insurance companies “charge higher prices to sicker customers,” which would be bad “for people who have, or ever will have, higher medical needs.” No. Walker’s plan, like the Burr-Hatch-Upton plan, would bar insurers from charging higher prices to sicker customers provided they had maintained continuous coverage, which presumably includes people with pre-existing conditions who had gotten coverage through Obamacare. Obamacare’s regulation, which bans discrimination with no requirement that people keep continuous coverage, reduces the incentive for healthy people to buy insurance and thus necessitates the individual mandate. The Walker idea increases the incentive to buy insurance and eliminates any need for a mandate. At the same time, it provides people with the means to get that continuous coverage.

4) Drum: “[I]f you let your insurance lapse, you’re screwed.” At that point you’d have to go to a high-risk pool. (For some reason Chait ignores the insurance regulation part of Walker’s plan and Drum ignores the risk pools.) Remember, though, that we’re talking about a population with both the means and a strong incentive to keep covered.

5) “Walker will somehow prevent insurance companies from raising your rates if you maintain continuous coverage. He provides no clue just what kind of insurance regulation would accomplish this, and for a good reason: I doubt there is one,” writes Drum. How Walker will do this “remains a mystery.” A protection for people in the group market who have maintained continuous coverage has been law since 1996. Walker’s plan would just expand and strengthen that approach in the individual market. You can read more about the basic idea here or here. There’s no mystery.

6) Drum: “Walker’s tax credits would, at best, pay only for catastrophic coverage. Maybe not even that. Nor will his plan cover everyone. Nor is it likely to cost nothing. Nor does it have any concrete proposals to reduce the cost of health care. If you think that’s OK, then Walker is your guy.” Drum started off confessing his boredom with reading Republican health proposals, and by this point he’s not even trying. Walker’s plan would not cover everyone, largely because nobody would be forced to buy health insurance, but neither is everyone covered by Obamacare. Capping the tax exclusion for employer-provided coverage is as much a “concrete proposal to reduce the cost of health care” as anything in Obamacare. And so on.

What the critics have established is that  Walker’s plan looks pretty bad if you ignore its key provisions, judge it by unreasonable yardsticks, approach it in bad faith, or all of the above.

Update: Forgot to add: (disclosure)

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