The issue of health care has taken center stage in this year's presidential election. If elected, Gov. Mitt Romney has said he would repeal the 2010 Affordable Care Act (ACA) that was passed under President Barack Obama, and instead give block grants to states for Medicaid and encourage more people to buy health plans in the individual market.
“Rather than have the federal government pick up certain costs in each state, Romney would give each state a block grant — a fixed amount — which doesn't grow as fast as health care cost inflation,” explained Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology who has no role in either candidate's campaign.
Over time, the block grants wouldn't increase as fast as states' Medicaid needs, which rise with health care inflation, Gruber said.
The ACA would likely provide more people with health care coverage than Romney's plan, experts say. People who don't have health coverage through their employers will be able to purchase health insurance in an exchange, a marketplace that allows people to compare health plans. And people with low incomes who can’t afford to buy insurance would receive financial aid from the government.
But the ACA will cost an estimated $1.17 trillion over the next 10 years, according to the U.S. Congressional Budget Office. Some experts believe repealing the law would ultimately increase health care costs even more. For example, the law’s Medicare provisions would reduce Medicare spending by $716 billion over the next 10 years, according to the Kaiser Health Foundation.
In any case, experts say that an increase in the number of people with health insurance coverage would bring down the total costs.
“We can't begin to tackle health care costs in this country until we get everyone in the system,” said JoAnn Volk, who studies private health insurance health policy at Georgetown University. “Too many people slip through the cracks and don't have coverage, so their illnesses go untreated and get worse, or they get costly care in an ER.”
Here's a look at some of the other differences between the candidates' health care plans.
Health coverage for young adults
Under the ACA, insurers are required to offer coverage to young adults on their parent's insurance policies until age 26.
His plan will instead offer insurance coverage across state lines, giving people more options to choose the type of coverage they want — this means parents could choose an insurance provider that allows young adults to stay covered until age 26.
People with pre-existing health conditions
The ACA protects people with illnesses or disabilities. People who apply for health insurance coverage can't be denied for these reasons.
Although he hasn't spelled out his plan for people with pre-existing conditions, Romney's campaign website states that his plan will “ensure flexibility to help the chronically ill, including high-risk pools, reinsurance and risk adjustment.” In other words, his plan will protect those with pre-existing conditions, as long as they have maintained continuous health coverage.
Insurance coverage choices
Individuals and small business owners will have the option to choose a private health plan through an insurance exchange, and will get tax breaks to help pay for health insurance.
“Employers would be able to pay pretax dollars for their premium,” Volk said, and the money spent on insurance wouldn't count as income.
But people who don't choose any health plan will be penalized. The penalty could start at $95 a year, or up to 1 percent of income, and continue to increase to 2.5 percent by 2016, according to the Kaiser Family Foundation.
The plan includes setting up an insurance exchange, but people who choose not to buy coverage won’t be penalized. Whether the plan would include tax credits remains unclear.
The ACA allows insurers to charge premiums based on certain factors, including a person's age, smoking and family size.
This could lead to more affordable care for groups such as the elderly, who might currently pay higher premiums, but it will likely also bring higher premiums for young adults than most currently pay, Volk said.
“Premiums are going to go up,” Volk said. “It's just a question of what rate.”
For people without health coverage, Romney proposes regulating premiums or subsidizing insurance costs by pooling high-risk people. But he hasn’t provided details on how he plans to incorporate such changes.
According to Volk, a policy of using high-risk pools covers the sickest uninsured people who are present a risk for insurance companies.
Some experts say this means that health coverage would be at a high cost for people in these pools. Premiums can sometimes be 1.5 to 2.5 times more than the standard rate, said Volk.
In 2014, the ACA will expand Medicaid to 30 million uninsured Americans, and by 2019, an estimated 16 million more people will gain Medicaid coverage, according to the U.S. Congressional Budget Office.
Medicaid coverage will become available to individuals under age 65 with incomes up to 138 percent of the federal poverty level (about $15,400 for an individual in 2012, reports the Kaiser Family Foundation).
Children currently covered by the government's Children's Health Insurance Program, who live in households with incomes between 100 percent and 133 percent of the federal poverty level, would be transitioned to Medicaid coverage.
Romney would give states control over deciding who to include in Medicaid programs. This means Medicaid coverage would vary based on state eligibility requirements.
Romney would also largely fund Medicaid through block grants from the federal government. This could mean less money for states, which would cause states to cut back on their Medicaid programs, Volk said.
To cut back on Medicare spending, the ACA will reduce payments made by Medicare to hospitals and other health care providers.
The plan also provides free coverage to Medicare recipients for preventive health services, such as vaccinations, annual physical exams and breast cancer screenings, and closes the coverage gap in prescription drug coverage, also known as the “doughnut hole,” by 2020.
Under the Romney plan, seniors would get a voucher that will cover the costs of some low-cost health plans.
Over time, the amount of the voucher would increase, but it would grow slower than the costs of health care.
“Romney has said that his voucher would grow according to low-cost health plans,” Gruber said. “So seniors can always get a low-cost plan, but if they want better health coverage, they would have to pay for it out of their own pockets.”
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