Thursday, October 30, 2014

Gillespie's Unsung ObamaCare Reforms

Ed Gillespie
Once a reliably red state, Virginia has gone blue in the last six years, and despite the roaring discontent with President Obama and the Democratic Party, it looks as if Republican gubernatorial candidate Ed Gillespie will not be able to capitalize on the voter discontent for a victory in the Old Dominion State.

His poor polling hides from national attention his bold proposals to undo and improve the Affordable Care Act, but even the Washington Post took the time to review his reform package.

Ed Gillespie, Senate candidate in Va., unveils alternative to Affordable Care Act

Virginia Senate candidate Ed Gillespie unveiled a health-care reform proposal Friday, offering an alternative to a law he would like to see repealed.

So much for the mainstream media meme which argues that Republicans are just the "Party of No!"

Gillespie, a former Republican National Committee chairman who is challenging Sen. Mark R. Warner (D), has made opposition to the unpopular Affordable Care Act a cornerstone of his campaign. Democrats have repeatedly challenged Republicans who oppose the health-care law to explain what they would do after a repeal. Gillespie is one of a handful candidates who have done so.
“We can do much better, and my alternative would,” he told about 100 business executives at the Virginia Small Business Partnership Summit in Tysons Corner.
We can do better: Americans have been thinking and feeling this sentiment. Gillespie articulates it without reserve.
His plan would end the individual mandate to buy health insurance, the health-care exchanges and all of the law’s industry regulations. In their place, he would offer tax credits that increase with age and family size.

A bold maneuver. The individual mandate is a tax, and a crippling one which will hurt average families, including young people who will no longer be able to stay on their parents' insurance, even after their twenty-six birthday. The regulations on industries are driving up the costs of health insurance, too, while rationing the available number of doctors and health care providers still willing to put up with the paperwork.

Adults younger than 35 would get $1,200 a year. Those 35 to 49 would get $2,100 a year. Those 50 and older would get $3,000 a year. For every dependent child, the credit would increase by $900.
While many individual premiums have gone up under the Affordable Care Act, Gillespie argued that competition — including across state lines — would help lower premium costs in the individual market. Citing Government Accountability Office numbers, Gillespie said the credits would be sufficient to buy coverage in most cases. This GAO report refers only to base rates, noting that actual premiums could be higher. In addition, under Gillespie’s proposal, family plans would no longer be required to cover young adults until age 26.

Competition is the missing element in many discussion on Obamacare, too. The state health care exchanges do not constitute choice, however, since they rely on taxpayer, government money instead of gaining profit through voluntary trade. However, tax credits alone may create a different form of inflation, unless the regulatory burdens and state exchanges are removed right away first. That incumbent element may not prove difficult, since ongoing legal challenges to Obamacare are ruling that the federal government can only grant subsidies in states with their own health exchanges, The federal exchange will fall apart in the majority of states, then, which have not enacted their own insurance markets.

File:Ed Gillespie - Fairfax County GOP Meeting.JPG
Ed Gillespie in Fairfax County, VA

For those with pre­existing conditions, Gillespie proposed that policies could be purchased during specific windows. Parents of newborns would have six months to obtain coverage for them. When children turn 18 or leave their parents’ insurance, they would have six months to get coverage. People who lose employer-based insurance would have two months. Once those policies were in place, they could not be revoked.

“No one with continuous coverage could be dropped from their insurance or be repriced due to a pre­existing condition,” he said.

That policy would perform some of the same functions as the individual mandate, Gillespie said: ensuring that people don’t “game the system by going without insurance but then trying to buy it after a costly diagnosis.”

This proposal is important. Insurance companies cannot assume complete risk and cost. Otherwise, why have health insurance in the first place?

For those with pre­existing conditions who can’t afford insurance with a tax credit, Gillespie would set aside $75 billion over 10 years to set up state-run high-risk pools.

This part is not a good idea. More government risk-taking is wrong. Fannie Mae and Freddie Mac should discourage federal risk management from now on.

Instead of the so-called Cadillac tax on very expensive ­employer-offered plans, Gillespie would cap the tax exclusion for those at $20,000 per family plan and $8,000 per individual plan.
Medicaid, expanded in some states under Obamacare, would go back to its previous eligibility levels. The 11 million people who the Congressional Budget Office estimates would sign up for Medicaid by 2015 would be eligible for tax credits instead.

There. Let individuals take control and responsibility for their health care and health insurance. It's time to get people off the government dole, middle class as well as working class and corporate.

The plan is modeled on one created by the conservative 2017 Project. That plan was scored by the Center for Health and Economy as saving taxpayers $1 trillion compared with the Affordable Care Act. The think tank was founded by Douglas Holtz-Eakin, a conservative economist.

Saving money -- now there's something we haven't heard about for years.

Democrats argued that a plan such as Gillespie’s would push too much cost on consumers while exposing them to the vagaries of a less-regulated marketplace.

Electoral results  (2008 v. 2012)

Marketplaces are already well-regulated, by competition, persuasion, and better choices from individual seeking a better product with less money. Free markets are not absent of rules, but have the simplest regulations which require all companies to make wise choices about supply and demand, or face loss, bankruptcy, an asset reduction.

Gillespie's plan to remove the individual mandate and state health care exchanges, coupled with tax credits and increased competition across state lines incorporate key free market reforms which define the Republican Party platform and can advance a positive, pro-growth image of the party in the next two years.


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