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Inside Scott Walker’s Plan to ‘Repeal and Replace’ Obamacare

Image: Republican presidential candidate and Governor of Wisconsin Scott Walker speaks at the Iowa State Fair in Des Moines

Republican presidential candidate and Governor of Wisconsin Scott Walker speaks at the Iowa State Fair in Des Moines, Iowa August 17, 2015. REUTERS/Joshua Lott JOSHUA LOTT / Reuters

For the first major policy speech of his presidential campaign, Wisconsin Gov. Scott Walker chose the issue that has been the bedrock of Republican opposition to President Obama for the past six years – Obamacare.

On Tuesday, Walker laid out his health care proposal with a pledge: “On my first day as President, I will send legislation to the Congress that will repeal Obamacare entirely and replace it in a way that puts patients and their families back in charge of their health care - not the federal government.” Walker’s proposal is notable for including ideas to replace Obamacare, not simply repeal it. Here' a closer look:

What is Walker proposing?

Walker wants to repeal the Affordable Care Act (ACA), as all his fellow Republicans say they do. What is more interesting is what he proposes to replace it with. Walker would provide a fixed amount for all Americans without insurance to buy a health insurance plan. The amount would go up by age. So you would get $1200 per year if you were between ages 18 and 34, but the tax credit is $3000 for those between ages 50 and 64. People who are older tend to have more illnesses and spend more on medical care, so such a sliding scale makes sense. You could then use that money to buy a plan from any provider across the country. The health care exchanges by state under the ACA are gone in Walker's vision.

He would also essentially let states run their own Medicaid programs.

Scott Walker: On My First Day I will Repeal Obamacare 3:45

How is this different from Obamacare?

Much different. To put it simply, the ACA is full of federal rules governing health care, and Walker wants to get rid of most of them. The ACA gives states billions of dollars to expand Medicaid, the program for low-income people, but with a number of stipulations on how those funds can be spent. (A state can’t require Medicaid recipients to take drug tests, for example.)

Walker would provide states with Medicaid funding, but allow them to determine who is eligible. So this would mean that poor people in liberal Massachusetts are able to get insurance easier through Medicaid than those in conservative states like Texas, which might require drug tests if it was allowed by the federal government.

The ACA creates health care “exchanges” where people can buy health insurance plans, with precise provisions on what these plans must cover (dental care for those under 19 for example) and what prices they can charge (you can’t be charged more because you have a pre-existing condition). Walker would get rid of most of the rules for these health insurance plans. Obamacare in effect argues the government knows better than you do what your health insurance should include.

Under the Walker plan, you could have a very bare-bones health insurance that is very cheap but also covers little. Or you can have no health insurance at all, unlike Obamacare, which requires you to get health insurance or pay a fine.

The ACA is built in a redistributive way. People who are young and healthy are required to buy comprehensive insurance that they might not use that often. Insurance companies can make profits off of those consumers to make up for the older, less healthy people they are required to cover under the law.

The danger of losing the young people from the health insurance markets is that older folks might face higher costs.

How does this affect actual people?

Everyone’s health situation is different. But under Obamacare, the government mandates you buy a fairly comprehensive health care plan and provides money to those who can't afford such a plan. The Walker plan gives everyone who is uninsured a tax credit and they can buy whatever plan they want. Some people are likely to save money on insurance, but others are likely to buy plans that don't provide sufficient coverage, raising overall costs if they get ill.

The big challenge is people who already have pre-existing conditions, meaning they have illnesses and insurance companies will inclined to charge them very high prices. Walker suggests states create "high-risk pools" for this population. These pools did not work well in the pre-ACA era, often not sufficiently funded by states.

And for Medicaid recipients, their level of benefits would depend heavily on what state they live in.

How is this different from other Republican proposals?

Most of the other Republican candidates have not issued detailed health care plans. But Walker’s vision is in the mainstream of the GOP and similar to a proposal from Florida Sen. Marco Rubio, one of his rivals in the nomination fight.

The general GOP view of health care is to let the states run Medicaid programs and give uninsured Americans some kind of tax credit to purchase coverage.

Republicans Vow to Keep Fighting Obamacare Despite SCOTUS Ruling 1:12

How will this proposal help him win the primary/election and the general election? Could it actually hurt his chances of winning?

Nearly all of the Republican candidates are against Obamacare, so announcing a plan to repeal it is necessary, but insufficient to guarantee victory.

Still, Walker's plan is important for two reasons. As president, George W. Bush did little to reduce the number of Americans without health insurance. The release of a detailed plan by Walker and other Republicans illustrate the GOP realizes it cannot simply repeal Obamacare and walk away. Offering a replacement is now necessary, with the ACA having provided health insurance to millions.

Secondly, Walker's plan is in the mainstream of the Republican Party. It will be embraced by the party's wonks and establishment. It will help him woo parts of the Republican Party who may be worried about Walker's rightward shift on issues like immigration. At the same time, the plan is conservative and puts him to the right of Donald Trump on health care.

In a general election, the Democratic candidate will cast the Republican as taking away insurance from people who already have it.

A number of anti-ACA Republicans won in 2014, even in swing states. But the 2016 GOP nominee will be the first Republican to run in a national election where more than 10 million people have insurance through the ACA.

If he was elected, could this actually pass in Congress?

Yes. The Republicans are widely expected to keep control of the House after the 2016 elections. Republicans currently control the Senate as well. It’s very possible Walker or another Republican elected president will be governing with Republicans running both chambers of Congress.

There is a process in the Senate called reconciliation in which only 51 votes are needed to pass something and it cannot be filibustered. Democrats used this to pass some parts of Obamacare in 2010. So Republicans could write a provision that dramatically changes Obamacare with 51 Senate votes.

Is that politically realistic? Maybe. Most Republican members, even more moderate members, have pledged to fight Obamacare. But party officials have struggled to come up with a plan that would address the 16 million people who have gained health insurance since the law’s passage.

Walker’s plan, at least at first glance, would result in some Americans losing their insurance and costs going up for others. (To be sure, millions of others might pay less.) The conventional wisdom is that it is very hard to take away benefits people are already receiving, even if you are pledging to replace them with something similar. And massive health care overhauls are very politically difficult, as both Bill Clinton and Barack Obama learned. Does Scott Walker want to spend his first term in a huge health care fight?

But Walker, perhaps more than any 2016 candidate of either party, has cast aside such conventional wisdom before. He ran a milquetoast campaign to get elected Wisconsin governor in 2010, then a few months fought for and got passed an aggressive provision that gutted public employee unions in Wisconsin.

He will not be scared to take on Obamacare.

Do any Democrats support this idea?

No. Democrats will universally oppose Walker’s health ideas. They broadly support Obamacare, and those Democrats who don’t like it want the federal government to impose more rules on states and insurance companies, not fewer. After Walker unveiled his proposals Tuesday, Democratic front-runner Hillary Clinton took to Twitter to respond: