Two GOP presidential candidates release their health plans

Both plans include subsidies to help individuals purchase private coverage

Republican presidential candidates Wisconsin Gov. Scott Walker and Florida Sen. Marco Rubio this week both outlined their proposals to replace the Affordable Care Act (ACA).

Walker's plan

Walker outlined his plan in a white paper and policy speech on Tuesday.

Subsidies

The plan would repeal the Affordable Care Act and replace its subsidies with tax credits—based on a person's age, rather than income—to help U.S. residents purchase private coverage. The subsidies would range from $900 for minors up to age 17 to $3,000 for Americans ages 50 to 64. The credits would be available to any individual whose employer does not offer coverage.

Mandates, pre-existing conditions

The plan would also not include an individual mandate. However, individuals would be required to "maintain continuous, creditable coverage" to prevent insurers from later denying coverage based on pre-existing conditions or significantly increasing premiums when an individual is sick.

For those who do not maintain a level of continuous, creditable coverage, Walker's plan would provide federal funds to states and "provide states flexibility to close those existing coverage gaps," including potentially by expanding high-risk pools.

Walker also proposes to eliminate certain regulations on health plans, which Walker claims would help to lower premiums by about 25%. For example, the plan would do away with requirements that insurers cover essential health benefits, such as mental health services and maternity care.

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Other components

The plan also would:

  • Allow insurers to sell plans across state lines without an agreement between states;
  • Authorize new health plan purchasing agreements, in which organizations can join together to negotiate better rates;
  • Deregulate the long-term care insurance market;
  • Place limits on medical malpractice suits;
  • Provide $1,000 tax credits to individuals who enroll in health savings accounts (HSAs);
  • Shift certain regulatory power to states, such as whether to allow individuals to stay on their parent's insurance up to age 26; and
  • Restructure Medicaid into three smaller, separate programs with distinct funding streams.

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The plan does not include estimates of how many people it would cover or how much it would cost. Walker says it would not add to the federal deficit. According to Walker campaign officials, the plan would be funded by cutting $1 trillion in taxes currently in place under the ACA, reducing Medicaid spending, and changing how health plans are taxed.

Rubio's plan

Rubio outlined his plan in Politico on Monday.

Subsidies

The senator said he would also repeal and replace the ACA, while continuing to offer Americans subsidies to help them purchase private coverage. Rubio did not specify how the subsidies would be calculated, but he wrote that "the value of these credits should increase every year, and we should set the tax preference for employer-sponsored insurance on a glide path to ensure that it will equal the level of the credits within a decade."

At the same time, Rubio's proposal would slowly decrease the tax exclusion for employer-sponsored insurance.

Mandates, pre-existing conditions

Rubio's plan does not include individual or employer mandates, and he proposes to eliminate many of the ACA's current insurance regulations.

The senator wrote that individuals with pre-existing conditions "should have access to affordable care through mechanisms such as federally-supported, actuarially-sound and state-based high risk pools."

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Other components

Rubio also proposes to:

  • Allow insurers to sell plans across state lines without an agreement between states;
  • Expand HSAs and other "consumer-centered products";
  • Turn Medicaid into block-grant program; and
  • Transition Medicare into a premium-support program for future beneficiaries.

Rubio did not indicate what the plan would cost or how it would be funded, although he said that the plan would not include tax increases (Alonso-Zaldivar, AP/New York Times, 8/18; Epstein/Armour, Wall Street Journal, 8/18; Rubio, Politico, 8/17; Kliff, Vox, 8/18 [1]; Kliff, Vox, 8/18 [2]; Walker plan, 8/18; Sanger-Katz, "The Upshot," New York Times, 8/18).


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