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Republicans have been pointing out the failures of the Obamacare rollout, telling voters, "We told you so." But the health care law’s problems aren’t a complete boon for the GOP. More and more, they’re getting questions about what their big ideas for health care are.
Democratic pundit and sometimes political adviser Donna Brazile made that point during an installment of CNN’s Situation Room.
"They have a blank slate," Brazile said. "They're not offering an alternative. They're not giving people who are desperately seeking health care an option to even enroll in something that they can afford."
We asked Brazile if she was referring to the approximately 47 million uninsured people in the country and she told us "Yes. I was referring to those who would qualify for Medicaid, etc."
We wanted to know what the Republican ideas would do to make insurance affordable for people of modest means. So we looked at some of the bills they’ve introduced this session to fact-check Brazile’s statement.
Ideas on the Republican menu
Not all but most of the nine bills on our list use the tax code to put more money in citizens’ pockets on the condition that the money will be spent on health care. We found three basic approaches that potentially address insurance affordability.
Overhauling health care tax deductions
The most generous proposal comes from the conservative Republican Study Committee, which put forward a bill with 100 cosponsors. H.R. 3121 would give a $7,500 deduction to individuals and a $20,000 deduction to families.
We saw two big catches here. You would need to have insurance in the first place. Plus, the bill would eliminate the biggest tax break households enjoy today, the portion of their premiums paid by their employer. Getting rid of that $170 billion tax benefit would be a tough sell and a dramatic change to employer-provided insurance.
Refundable tax credits
These are like tax deductions, with the big difference that you can claim the credit even if you don’t have taxable income. H.R. 2300 from Rep. Tom Price, R-Ga., offers a maximum tax credit of $5,000 for families making up to 200 percent of the federal poverty level, or about $47,000 a year. The bill covers the cost of the tax credits with a blend of savings from medical malpractice reform, reducing waste, fraud and abuse, and cuts in discretionary spending.
Health Savings Accounts
These are accounts that enjoy a trifecta of tax breaks. Money goes in tax-free, the returns on investment accumulates tax-free and some withdrawals are tax-free. Several bills loosen the rules on health savings accounts to allow more people to put more money into them.
Additional GOP ideas include medical malpractice reform, allowing small business to form their own insurance buying pools, letting insurers sell policies across state lines and subsidizing state high-risk pools for people who can’t insurance anyplace else. These changes would be significant but would have only an indirect impact on families seeking affordable insurance.
Assessing the Republican options
None of the Republican proposals have undergone an intensive independent analysis of how they would help the needy.
Based on interviews with experts and our research, the two possibilities that would most directly provide affordable insurance are tax deductions and refundable tax credits.
A tax deduction that would offset payroll taxes could touch many families of limited means. About 50 million taxpayers making less than $40,000 a year pay such taxes. But there’s a chicken-and-egg issue here. Until you have insurance, you can’t get the tax break and the bill doesn’t provide a way to help workers get over that hurdle.
Plus, the bill relies on the elimination of the tax break on employer-sponsored health insurance. This would represent a radical shift in federal tax policy.
In terms of feasibility, the majority of analysts we talked to give the edge to the refundable tax credit approach. That does not mean there is a resounding consensus on how much it would achieve.
The proposal from Price would make credits payable in advance. In other words, you could use the federal credit even if you didn’t have the money up front to pay for insurance.
While the details are different, this resembles the program put forward by President George W. Bush. A 2005 study of the Bush plan by the Tax Policy Center, a joint project by the Urban Institute and the Brookings Institution, found that "lower-income individuals experience the largest declines in uninsurance rates" under the Bush proposal.
However, of the 45 million people uninsured then, Bush’s $3,000 tax credit plan would have helped only about 2 million people who made less than 200 percent of federal poverty and just a bit over 3 million overall.
Thomas Buchmueller, a health economist at the University of Michigan, said it is a major undertaking to provide insurance to those who lack the money to pay for it.
"Tinkering with tax deductions and making health savings accounts more attractive is not going to change that basic fact," Buchmueller said. "Roughly half of the Affordable Care Act coverage gains come from expanding Medicaid. I don't see anything in these proposals that would do much for the people who will gain Medicaid under the ACA."
Conservative analysts see more promise in the use of refundable tax credits. Nina Owcharenko with the Heritage Foundation, a group that has supported tax credits for many years, wrote in 2005 that this approach could go far to level the playing field, "especially lower-income individuals who do not fit into today's patchwork health care system."
One of the widest gaps between Democrats and Republicans is the basic understanding of what it means to offer a plan to people of limited means. For Democrats, a plan is an identified insurance policy, whether public, as in expanded Medicaid, or private, as in buying subsidized private insurance through a web-based, highly regulated marketplace. For Republicans, a plan is anything that makes buying insurance more affordable, however the person finds the policy.
Brazile said Republicans offer no option for those who are desperate for coverage the chance to enroll in something they can afford. Within a more Democratic definition of a plan, that claim is accurate.
However, using a broader definition, the Republican plan to use refundable tax credits would likely have some impact on Americans of very limited means. Opinions vary widely on how many Americans this would help, but a program of this sort would do something for a portion of the people Brazile had in mind.
While the Republican option is full of uncertainty and results might be limited, they are more than nothing.
Still, supporters of the GOP reforms were unable to point to independent studies to show how much their ideas for tax deductions and tax credits would accomplish, and previous independent analysis suggests they would have a modest impact on reducing uninsurance rates.
We rate Brazile's claim Mostly True.
CNN, The Situation Room, Nov. 19, 2013
Tax Policy Center, Distribution of federal payroll and income tax, 2013
Fox News, Rep. Price talks about Obamacare failures, Nov. 19, 2013
Robert Wood Johnson Foundation, Consumer-directed health plans: Do they deliver?, October 2012
Upjohn Institute for Employment Research, Refundable tax credits for health insurance, July 2005
American Enterprise Institute, The impact of recent Republican health reform proposals, Sept. 20, 2007
State Health Access Data Assistance Center, State high-risk pools: An overview, July 2008
Rand Corporation, Analysis of refundable tax credit, March 28, 2011
Congressional Budget Office, Analysis of the effect of proposals to limit costs related to medical malpractice, Oct. 9, 2009
Tax Policy Center, Tax Credits for Health Insurance, June 2005
Congressional Budget Office, Selected CBO publications related to health care legislation - 2009-2010, December 2010
California Research Bureau, Overview of federal tax incentives for health insurance, March 2007
Heritage Foundation, Health care tax credits: The best way to advance affordability, choice and coverage, Nov. 28, 2007
Bloomberg, A serious Republican health care plan, Sept. 23, 2013
PolitiFact, GOP health care reform: A simple explanation, updated, Feb. 26, 2010
Heritage Foundation, Health care tax credits: designing an alternative to employer-based coverage, Nov. 8, 2005
Texas Public Policy Foundation, How conservatives should talk about Obamacare, Nov. 20, 2013
Email interview with Stephen Bell, communications director, Republican Study Committee, Nov. 25, 2013
Email interview with Ryan Murphy, communications director, Rep. Tom Price, Nov. 25, 2013
Email interview with Tevi Troy, senior fellow, Hudson Institute, Nov 21, 2013
Email interview with Henry Aaron, economist, Brookings Institution, Nov. 21, 2013
Email interview with Thomas Buchmueller, economist, University of Michigan, Nov. 21, 2013
Email interview with Roger Feldman, economist, University of Minnesota, Nov. 22, 2013
Email interview with William Dow, economist, University of California - Berkeley, Nov. 22, 2013
Email interview with Donna Brazile, vice chair, Democratic National Committee, Nov. 21, 2013
Email interview with Bryant Renaud, senior research assistant, Brookings Institution, Nov. 25, 2013
Republican Study Committee, American Health Care Reform Act, Sept. 18, 2013
Empowering Patients First Act, June 6, 2013
Access to Insurance for All Americans Act, Feb. 15, 2013
Family and Retirement Health Investment Act of 2013, May 23, 2013
Common Sense Health Reform Americans Actually Want, Sept. 20, 2013
Helping Sick Americans Now Act, April 15, 2013
Health Care Price Transparency Promotion Act, March 22, 2013
Health Care Choice Act, April 23, 2013
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