The Continuing Myth About The ACA And The Heritage Plan

It takes courage, humility, and honor to admit when you've made a mistake. That's why you've never seen me do it on this blog. But I have to admit, I have been absolutely wrong about the Affordable Care Act. For years, I have believed that the Democrats essentially took a Heritage Foundation proposal that Republicans put forward back in the 1990s to stop Bill and Hillary Clinton's health care plan but had no interest in actually implementing and turned that very plan into the ACA. In some ways that it is true but in more ways it is false. Scott Lemieux over at Lawyers, Guns, and Money shows me the error of my ways.

The Republican plan, known as the Heritage plan because it originated at the conservative Heritage Foundation, has long been assumed as the template for Romneycare in Massachusetts and the Affordable Care Act. But the Heritage plan was actually nothing like those plans and was not really involved in stopping Clinton's health care initiative. Instead, it was a bill that was introduced by Republican John Chaffee and had some moderate GOP support during Clinton's effort that has the greatest resemblance to the ACA. The Chaffee plan had an individual mandate, standardized benefits, vouchers for poorer people to purchase insurance, and the ban on denying coverage for pre-existing conditions. That is remarkably similar to the principles of Obamacare.

But the Chaffee plan was not the Heritage plan and was nothing like it. The Heritage plan basically took form in the late 1980s and its purpose was not to really provide health care but to dismantle Medicare and Medicaid and to replace all insurance coverage, include employer based, with skimpy, and probably expensive, catastrophic plans. The only principle the Heritage plan has in common with the ACA is, ironically, the individual mandate that everyone carry health insurance. Even that conservative principle has fallen victim to Paul Ryan's vision of "freedom".

The differences between the two plans are stark. Lemieux has provided a nice visual to highlight those variances.

As you can see, the Heritage plan originally was designed to turn Medicare, not Medicaid, into a voucher system that would probably restrict coverage and not keep up with the rate of medical inflation. It gutted Medicaid, eliminated regulation of insurers, and provided minimal actual insurance protection. Even worse, the plan originally intended to roll back the tax incentives for employer provided insurance, essentially forcing everyone to buy their own insurance. It's main purpose was to gut the two big entitlements of Medicare and Medicaid and relieve employers of the responsibility of picking up health insurance for their employees. None of this resembles the ACA in any way and much of it was even too extreme to become part of Trumpcare.

It is understandable that Democrats wanted to feed the myth that the ACA was actually based on a Republican plan that the GOP only offered as an alternative but had no real interest in implementing. It made for a good sound bite and good politics. And it is actually partly true. But the Republican plan the Democrats were really implementing was based on the Chaffee plan and had nothing to do with the plan put forward by the Heritage Foundation. So I stand corrected.