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Health Experts Question Aspects of Republican Health Plans

By Andrew Siddons, CQ Roll Call

December 16, 2016 -- Republican proposals to replace President Barack Obama's health care law will have a tough time overcoming certain policy hurdles, according to a group of experts speaking at the American Enterprise Institute (AEI) on Friday.

Congressional Republicans have not yet reached a consensus on exactly how they will overhaul the health system next year, but several core proposals are under discussion.

For instance, a white paper put forward by House Speaker Paul D. Ryan, R-Wis., would replace a mandate for insurance coverage with different incentives to have and maintain coverage. People with preexisting conditions wouldn't be denied coverage, according to his blueprint. They wouldn't be charged more for coverage as long as they remain continuously insured.

That would present some tricky policy questions for lawmakers and insurers alike. The continuous coverage requirement could prove to be complicated, especially for people who are between jobs or for families undergoing changes due to death or divorce, according to Robert Reischauer, a fellow at the liberal Urban Institute and a former director of the Congressional Budget Office.

"That could prove to be horrendously complex to administer and prove to be quite intrusive, if you have to keep a record of every month that every person has insurance," he said.

John McDonough, a public health professor at Harvard who helped shaped the current health care law as a Senate adviser from 2008 to 2010, said that the well-off might find it easier than lower-income people to maintain coverage. He questioned just how that mechanism might work and how long individuals might be penalized if they drop their coverage.

"How do you maintain continuous coverage? How long is the gap?" he asked.

Another potential policy change favored by President-elect Donald Trump would allow insurers to sell coverage across state lines, potentially increasing competition and creating larger customer bases for insurers to make their business models work.

That would also present complications, requiring state insurance commissioners to harmonize regulations, and challenges for any state-based high-risk pools that could lose customers to insurers elsewhere.

"Anyone who implies that moving in that direction is some sort of a game-changer really doesn't understand how insurance markets currently work," said Scott E. Harrington, a professor of health care management at the University of Pennsylvania's Wharton School of Business. 

Republicans have promised to repeal different parts of Obama's health law, including the mandate for most individuals to have coverage and large employers to offer insurance to their workers, and different taxes that have been used to subsidize consumers on the individual markets.

Without a replacement plan in place, Democrats and the insurance industry have warned that the market could enter a period of turmoil as some customers stop paying premiums and only the sickest sign up for coverage. In order to counter this, many believe that some kind of financial support will be necessary to help the insurance industry in the short term.

"I think some stability mechanism really would be desirable to ensure things work," Harrington said.

Thomas P. Miller, a fellow who specializes in health policy and insurance at AEI, a conservative think tank, agreed that Republican lawmakers would likely have to do something to incentivize insurance companies during the transition.

"You can stage manage transitions however you want to. You flush dollars out the door to keep people at the table, or you threaten them with higher taxes for exiting those markets as the flip side of it," he said.

But he did not think that repeal would lead to turmoil in the insurance industry. "You self-correct, you sell different products, you do it different ways," Miller said. "It never hits that explosive point. We move on to another set of disappointing, frustrating policies, and that's what we call success."

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