Why Romney’s “repeal and replace” plan for Health Care would fail millions of Americans

Yesterday afternoon, Obama for America’s Policy Director James Kvaal posted a blog item explaining how Mitt Romney’s new “repeal and replace” health care plan would once again allow health insurance companies to discriminate against people with pre-existing conditions and create millions of new uninsured Americans. Below is his post:

Why Romney’s “repeal and replace” plan for Obamacare would fail millions of Americans

Obama for America Policy Director James Kvaal explains why Romney’s “repeal and replace” plan fails to offer anything new or provide the health reforms that will actually provide millions of Americans with affordable, quality care:

Yesterday, Governor Romney repeated something we’d heard before about his “plan” for health care. What he didn’t tell us—and what he’s hoping we don’t realize—is that the centerpiece of his “plan” has actually been the law since 1996.

Pre-existing conditions

Romney told us that he wanted to help individuals with pre-existing conditions get coverage. Under his proposal, anyone with a pre-existing condition who has been “continuously insured” should have a way to get coverage if they “lose their jobs or change jobs.”  That makes sense to most people, but it’s not a new idea. In fact, it’s a core provision of President Clinton’s Health Insurance Portability and Accountability Act (HIPAA), which was enacted in 1996.

Under HIPAA, if you have been continuously covered without any lapses—a big if—then you are protected in two ways. First, if you change to a new job with new insurance, then your new plan cannot exclude your pre-existing condition. Second, if you lose your job and run out of COBRA coverage, you have the right to buy coverage without being denied based on a pre-existing condition. Romney’s proposal is the very same thing—protect people with existing insurance when they lose or change jobs.

Today, Romney claims he is opposed to health care mandates because there shouldn’t be a penalty for going without insurance. But under his proposal, the penalty for foregoing insurance is involuntary entry into a life-threatening lottery—if you develop a serious disease while you are between insurance policies, you could be locked out of the private health insurance market.

There’s a reason Romney’s plan is so limited: he’s concerned about “free-riders,” people who would wait to buy insurance until after they got sick. This is something that Romney—and health economists—have been concerned about for years. However, when Romney was governor of Massachusetts, he had a different and far more comprehensive solution to the free-rider problem, which he enacted into law as part of health reform in his state. Under RomneyCare, anyone can buy insurance without being denied or charged more based on a pre-existing condition, and lower- and middle-income families get financial assistance to make insurance affordable. But to prevent free-riders, people who can afford insurance but chose not to buy it have to pay a penalty. That worked well in Massachusetts, and it is the same approach that President Obama took in the Affordable Care Act.

Obamacare and Romneycare protect a lot of people that are left out under the 1996 law and what Mitt Romney is proposing today: people who lose their job and can’t afford COBRA, children who are diagnosed with cancer or autism when their families are uninsured, people who aren’t offered insurance at work and have had no way to afford coverage before, or anyone else who has a gap in coverage. Up to 129 million Americans have a pre-existing condition, and they all deserve protection—and that’s what the Affordable Care Act does.

Addressing coverage and costs

The President’s leadership on the Affordable Care Act has also taken on a number of other problems that Romney would prefer to ignore. Obamacare puts in place reforms that will help cover the uninsured: more than 30 million people will gain health insurance because of the law. Romney’s proposal for the uninsured is to block-grant Medicaid and slash billions of dollars from the program—an approach that independent experts estimate will mean 14 to 27 million fewer people with health insurance.

And perhaps nowhere is the contrast more clear than on addressing health care costs. President Obama’s law takes aim at the rising costs of health care, and puts in place serious reforms that will slow growth and make sure health care remains affordable. The Congressional Budget Office estimated that, because of these aggressive efforts, the health care law will reduce the deficit by more than $100 billion in the first 10 years and more than $1 trillion in the second decade. Romney would repeal all of this and has offered no serious ideas to address the problem. In fact, yesterday—as Governor Romney was repeating his pledge to repeal the health care law—we received some tentative good news about how well the health care law is working. In a report on health care spending, the government’s actuaries estimated that the early reforms in Obamacare have actually reduced total health care spending. And they projected that health care as a share of GDP would remain constant from 2009 to 2013, an unprecedented signal that slowing health care cost growth may become the new normal.

In short, President Obama enacted a law that will help everyone with pre-existing conditions, cover the uninsured, and tackle rising health care costs. Romney would repeal these reforms, leaving health care costs on an unsustainable trajectory, and replace it with a law that has been on the books for more than 15 years.