(Bloomberg View) — The Republican presidential candidates are pitching Obamacare.
Marco Rubio wants to "ensure those with pre-existing health conditions can get access to affordable coverage." Ted Cruz wants to "delink health insurance from employment." Jeb Bush favors letting employers "use financial incentives to encourage wellness programs." John Kasich wants to use episode-based payments to hold down costs, and let doctors and hospitals share the savings from reduced spending.
What each of those proposals has in common is that Obamacare is already doing it. Passed in 2010, Obamacare — the Patient Protection and Affordable Care Act (PPACA) — prevents insurers from charging higher premiums based on your medical history. It built subsidized, regulated insurance markets for people who don't get coverage through their job. It increased the rewards employers can offer for joining a wellness program. And it created pilot programs in Medicare to advance accountable-care organizations and bundled payments, exactly the ideas Kasich supports.
While Bernie Sanders and Hillary Clinton argue over the most fundamental tenets of the U.S.'s private-insurer system, the Republican candidates are talking about health care as if the past seven years never happened. Pledges to "repeal and replace" Obamacare are cursory, with no sign of an attempt to understand where the law has succeeded or failed. And what's the replacement? The candidates have offered the same ideas Republicans offered four, eight or even 35 years earlier.
Take health savings accounts, which Cruz and Bush want to expand. These accounts allow workers to set aside pre-tax dollars to spend on health care, a proposal that was conceived to facilitate another market-oriented solution to rising health costs: health plans with high deductibles. But these are already proliferating, and their increase is one of the most criticized aspects of Obamacare.
Another idea, mentioned in New Hampshire by Cruz and Rubio, is letting people buy insurance across state lines, to encourage competition and drive down prices. The Congressional Budget Office looked at this proposal before Obamacare, and found that by itself, it would indeed lower premiums — but primarily for people healthy enough to use bare-bones plans. The change would increase costs for those with greater needs, so fewer of those Americans would have insurance.
Then there's Medicaid, whose expansion is one of Obamacare's major achievements and which provides coverage far more efficiently than either Medicare or private insurance. Rubio and Bush want to cut the program by turning it into a block grant, which entails giving states less money in exchange for more freedom in spending it.
That idea goes back to Ronald Reagan's first term as president, and ignores another lesson of Obamacare: the federal government has proven it will go along with almost any reform a state proposes. The current approach to funding is not preventing innovation at the state level. If states have good ideas for improving the program, there's little preventing them. People who want to deeply cut federal spending (a similar proposal from Mitt Romney would have cut $1.26 trillion over 10 years) can't plausibly say their motive is to inspire innovation.
