Praise for Burr’s Obamacare alternative

Avik Roy explains for Forbes readers why a proposal co-sponsored by U.S. Sen. Richard Burr, R-N.C., represents the best alternative to date to the troubled Affordable Care Act.

The latest entry into this field—and thus far, the best—is the new Coburn-Burr-Hatch proposal, called the Patient Choice, Affordability, Responsibility, and Empowerment Act. (They abbreviate this as the “Patient CARE Act”; I’ll call it Coburn-Burr-Hatch, or CBH.)

CBH would repeal Obamacare, and replace it with a set of more market-oriented reforms. One key point right at the start: the authors “believe our proposal is roughly budget neutral over a decade.” That is to say, for all the reconfiguring it does to the health-care system, it doesn’t substantially reduce the deficit. It may modestly reduce the amount of federal spending and taxation. The Senate trio aims to have their proposal fiscally scored by an outside group of economists, most likely Doug Holtz-Eakin’s Center for Health and Economy.

While the plan would repeal Obamacare, it would preserve some of the law’s most popular features, such as its ban on lifetime limits on insurer payouts, and its requirement that insurers cover adult children younger than 27. It would replace Obamacare’s premium hike on young people, known as age-based community rating, with a more traditional 5:1 rating band.

It wouldn’t maintain Obamacare’s individual mandate, nor its requirement that insurers offer coverage to everyone regardless of pre-existing health conditions. Instead, the plan would require insurers to make offers to everyone who has maintained “continuous coverage,” while aiding states in restoring the high-risk pools that served those who insurers won’t otherwise cover. Subsidy-eligible individuals who failed to sign up for a plan would be auto-enrolled in one priced at the same level as the subsidy for which they qualified.

The proposal would do some things highly popular on the right. It would encourage medical malpractice reform by “adopting or incentivizing states to adopt a range of solutions to tackle the problem of junk lawsuits and defensive medicine.” It would strive to expand price transparency and the supply of physicians.

Most importantly, the CBH plan would make substantial changes to the tax exclusion for employer-sponsored coverage, in order to fund subsidies for the uninsured. “Our proposal caps the tax exclusion for employee’s health coverage at 65 percent of an average plan’s cost” today, and then grows the cap at the rate of the Consumer Price Index—a common measure of inflation—plus one percent (CPI+1%).

No comments yet. You should be kind and add one!

Our apologies, you must be registered and logged in to post a comment.