The Agenda

PPACA Is More than the Exchange Model

I keep beating this drum, but I’ll try again. Ezra Klein thinks that conservatives are missing something really important:

“How I would do exchanges are very different than how Alice wants to do exchanges,” Ryan replied. “So Rivlin-Ryan didn’t get to the level of specificity of how these exchanges must be designed, because I have a different opinion with Alice on how they ought to be designed.”

Part of the difference might be that Ryan, like many conservatives, believes that we need to revamp the tax treatment of health insurance. Households would be given refundable tax credits towards the purchase of insurance. Most middle class and affluent families would have to “top up” the value of the credit to buy coverage with a high actuarial value. 

I’m still trying to find out what that different opinion is. An exchange is simply a regulated marketplace where you can purchase different insurance products. There aren’t too many controversial design issues affecting their construction. And both Ryan and Rivlin thought their vision close enough to jointly endorse a proposal — a proposal that Rivlin thinks is identical to the Affordable Care Act. So either Ryan-Rivlin isn’t real and it’ll fall apart as soon as the specifics need to be hammered out, or Ryan is proving Rivlin right when she said that “even if he agreed with me, he couldn’t say so.”

What I still don’t understand is why Ezra is conflating the subsidized exchanges with PPACA, which relies heavily on Medicaid expansion to achieve coverage expansion, that creates an approach to the tax treatment of health insurance that many critics consider unsustainable and opaque, and a number of other regulations. Rep. Paul Ryan backed a more decentralized version of the exchange model during the health reform debate, the Patients’ Choice Act, as Ezra explained in May of 2009:

 

Like the McCain health plan, it plows the money the government used to be spending on the employer tax exclusion into a refundable tax credit thateveryone receives ($5,700 for families, $2,300 for individuals). This is actually a progressive change. Rich people are generally employed and their employers generally provide them with health care benefits. Poor people are frequently not employed and the employers they do not have do not provide them with benefits.

But get ready for the break: Unlike the McCain health care plan, the Burr/Coburn/Ryan/Nunes proposal does not leave individuals to fend for themselves on the individual market. This was the McCain plan’s fatal flaw. The individual market is cruel, unpredictable, and expensive. The Patient Choice Act does not repeat it.

 

Instead, all those people who would be purchasing health insurance on their own under the McCain plan purchase it together under the Patient’s Choice Act. States are tasked with creating insurance marketplaces where consumers can easily compare different insurers, regulating insurers so they don’t make money by making health coverage unaffordable for sick people, regulating insurance products so they meet some minimum standard of comprehensiveness (serious wonks: This is the standard. Go nuts.), and creating automatic enrollment provisions that encourage more people to purchase health coverage.

So I’m still confused as to why Ezra doesn’t see how one could embrace something like an exchange model for over-65s and under-65s while still rejecting PPACA. 

For now, I think it remains safe to say that the theory behind Ryan-Rivlin’s Medicare exchange is the theory behind all exchanges — which is to say, the theory behind the Affordable Care Act.

It seems pretty clear that there are differences between Emanuel-Fuchs, Wyden-Bennett, Ryan-Coburn, and PPACA.

But watching Ryan try to deny that he’s aping the Affordable Care Act’s structure is telling. This comes only a week or two after Republicans were put on the defensive by the White House’s offer to let states opt out of the Affordable Care Act if they could come up with a plan that covered as many people, with as good insurance, at as low a cost. A few years ago, their plan was the Affordable Care Act — but it was called RomneyCare, or the Dole-Chafee bill. Then Democrats adopted their plan, and rather than view that as a victory for the conservative movement, Republicans abandoned it.

I’m not sure how telling this really is, as RomneyCare was embraced by a relatively small number of right-of-center wonks and elected officials — Ross Douthat and I considered it a promising if flawed model, for example, and I think it’s safe to say that we were not firmly in the center of the conservative mainstream at the time — and the Chafee plan was discredited as early as 1993, as I explained in this space in October:

[T]he Chafee plan lost support among Republicans in 1993 as its potential cost became clearer, as Paul Starr of Princeton noted in an excellent, comprehensive article on “What Happened to Heath Care Reform?” that appeared in The American Prospect in 1994. Having learned their lesson once, it’s hardly surprising that Republicans would start from their 1994 position rather than their 1992 position.

It’s possible that I’m missing something here, but it looks to me as though Rep. Paul Ryan’s position is perfectly consistent.

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