While questions remain about how the Obama administration will finalize many of the new requirements under the Affordable Care Act (ACA)—for example, the U.S. Department of Health and Human Services (HHS) has yet to issue regulations on the 2014 market reforms, the essential health benefits package, and federally facilitated exchanges—little is known about what the healthcare system would look like under presidential candidate Mitt Romney. With much attention focused on this week’s Republican National Convention, here’s our take on Romney’s platform regarding private health insurance and what it could mean for consumers and the future of the Affordable Care Act.
What is Romney’s healthcare platform? Although he signed sweeping health reform legislation as governor of Massachusetts in 2006, Romney has criticized “Obamacare,” pledged to “repeal and replace” the law, and noted that the ACA “will take us in precisely the wrong direction.” Although few details are given, Romney’s campaign platform emphasizes “policies that give each state the power to craft a health care reform plan” with the federal government “help[ing] markets work by creating a level playing field for competition.” Romney’s health reform plan then lists fifteen bullet points for fixing America’s health system:
- Block grant Medicaid and other payments to states
- Limit federal standards and requirements on both private insurance and Medicaid coverage
- Ensure flexibility to help the uninsured, including public-private partnerships, exchanges, and subsidies
- Ensure flexibility to help the chronically ill, including high-risk pools, reinsurance, and risk adjustment
- Offer innovation grants to explore non-litigation alternatives to dispute resolution
- Cap non-economic damages in medical malpractice lawsuits
- Empower individuals and small businesses to form purchasing pools
- Prevent discrimination against individuals with pre-existing conditions who maintain continuous coverage
- Facilitate information technology (IT) interoperability
- End tax discrimination against the individual purchase of insurance
- Allow consumers to purchase insurance across state lines
- Unshackle health savings accounts by allowing funds to be used for insurance premiums
- Promote “co-insurance” products
- Promote alternatives to “fee for service”
- Encourage “Consumer Reports”-type ratings of alternative insurance plans
What would Romney’s healthcare platform mean for consumers? While Romney’s vision may differ from President Obama’s in how these ideas are implemented, many of Romney’s ideas (at least as described here) are already permitted or required under federal law or were embraced in the ACA. These similarities suggest that the two candidates may be much closer on health reform issues than conventional wisdom suggests.
First, many of the above agenda items are already permitted under federal law. These ideas—such as allowing consumers to purchase insurance across state lines and empowering individuals and small businesses to form purchasing pools—are already allowed under federal law and by many states. In many cases, however, these options have not been widely adopted and CHIR faculty members are working with state regulators and insurance companies to better understand why so few states have been successful in doing so or taken steps to, for example, allow consumers to purchase insurance across state lines (check out our research here and here!).
Second, some of Romney’s agenda items are already required under existing federal law. For example, Romney’s plan to prevent discrimination against individuals with pre-existing conditions who maintain continuous coverage is currently required under a federal law known as the Health Insurance Portability and Accountability Act (HIPAA). However, as critics have noted, this proposal would not address access to coverage for millions of Americans who are uninsured and do not have access to health insurance, such as employees whose employer doesn’t offer coverage. Romney’s platform also proposes “limit[ing] federal standards and requirements” on private insurance but does not specify which protections he might roll back.
Third, many of the agenda items are major components of the ACA. Romney points to the need for exchanges, subsidies, IT interoperability, alternatives to “fee for service,” “consumer-reports”-type ratings, high-risk pools, reinsurance, and risk adjustment. Each of these ideas is included in the ACA and has either already gone into effect (e.g., each state has a Pre-Existing Condition Insurance Pool) or will go into effect under the ACA in 2014 and beyond (e.g., exchanges, federal subsidies, and accountable care organizations).
What would Romney’s healthcare platform mean for the Affordable Care Act? If elected, Romney has pledged to pursue the broader Republican platform to “repeal and replace” the ACA and has described doing so as his “mission.” He intends to issue an executive order to grant “Obamacare waivers” to all states and “then work with Congress to repeal the full legislation as quickly as possible.” Despite these pledges, it’s unclear how much Romney would be able to accomplish without full repeal of the ACA—a concern raised by Republicans themselves—particularly if Democrats are able to maintain their majority in the Senate.
The waivers he refers to are known as “Waivers for State Innovation.” There is a provision in the ACA (Section 1332) that allows states to apply for a waiver so long as the state’s proposed plan 1) provides coverage that is at least as comprehensive as the ACA’s requirements; 2) provides coverage for a comparable number of residents that would have received coverage under the ACA; 3) provides consumer protections (such as cost-sharing limits and limits on out-of-pocket spending) to ensure that coverage is at least as affordable as coverage under the ACA; and 4) does not increase the federal deficit. However, even if a state wanted to develop its own plan to meet these requirements, these waivers are not available until January 1, 2017.
Because the vast majority of the ACA’s reforms go into effect in 2014, insurers will likely have to comply with the ACA before state waivers become available so long as the law is not repealed. Thus, such waivers could be of limited usefulness, at least in the short-term. (To address this issue, Sens. Brown (R-Mass.) and Wyden (D-Ore.) have introduced legislation (supported by the Obama administration) that would make the waivers available earlier (in 2014) but the bill has yet to move out of the Senate Finance Committee.)
In closing, there appear to be a number of similarities between Romney’s platform and the ACA. These similarities remind us that the ACA incorporates a largely state-based, market-driven approach to health reform. Despite these broad similarities, stories like Joshua’s highlight just how much the details of health reform matter and the effects they can have on the availability, affordability, and adequacy of coverage for millions of Americans.