Experts say McFadden's health insurance ideas don't hold up

Mike McFadden
Republican candidate for U.S. Senate Mike McFadden during a debate at the Duluth Playhouse in Duluth, Minn., Oct. 1, 2014.
Derek Montgomery / For MPR News

Republican Senate candidate Mike McFadden takes advantage of every opportunity to slam the Affordable Care Act as bad for the nation.

In advocating for a replacement for the federal health care law, McFadden opposes a national solution. He would leave most of the decisions up to states, including whether to require people to buy health insurance.

But McFadden would force states to keep some of the most popular benefits of the heath care law. Their plans would be prohibited from placing lifetime caps on insurance payouts and they would have to allow parents to keep adult children on their insurance up to age 26.

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In addition, under McFadden's plan the federal government would give the states $15 billion to subsidize "high-risk" pools. He said those pools would provide health insurance to people with pre-existing conditions for the same price healthy people pay.

"What I can tell you fundamentally is that it's going to cost less by decentralizing it and allowing states to do it as opposed to the federal government," he said. "I believe that strongly."

Experts, however, say much of what McFadden proposes has been tried before and left millions of Americans without health insurance.

McFadden would allow small businesses to pool buying power to get reduced insurance rates, and let insurance companies compete across state lines. That would improve health care and bring down prices, he said.

Sen. Al Franken
Sen. Al Franken debates Republican challenger Mike McFadden, October 1, 2014 at the Duluth Playhouse in Duluth, Minn.
Derek Montgomery / For MPR News

Democratic U.S. Sen. Al Franken, who McFadden aims to unseat in the November election, said the Republican challenger's plan won't work.

Franken contends it's not possible to keep the popular parts of the Affordable Care Act without also keeping the mandate that people buy insurance, something he said is common sense.

"If you can't be denied because you have a preexisting condition, why get insurance unless you're sick? Why pay for it?" Franken asked. "So no free riders — that's what the mandate is."

MIT health economist Jon Gruber helped write the Massachusetts health care plan that then-Gov. Mitt Romney, a Republican, enacted in 2006. He said the nation's health care system could not pay for the benefits McFadden wants to offer without requiring everyone to buy into the insurance pool.

The Massachusetts plan, which included an insurance mandate, became the model for the Affordable Care Act.

"You can't fix the problem of the insurance market without a mandate, and that's not just a theoretical conjecture," Gruber said. "We've seen it. A number of states tried what this guy is suggesting in the 1990s. They tried putting all of those insurance regulations in without a mandate, and it blew up their insurance markets."

As for McFadden's contention that cross-border competition should be part of the health care solution, past regional attempts to spur sales across state lines were not successful, said Sabrina Corlette, a senior research fellow and project director at Georgetown University's Center on Health Insurance Reforms.

"What we found was that prices didn't go down," Corlette said. "There were no new insurance companies selling to consumers or small businesses. They were really sort of ineffective."

So too were the government-subsidized high-risk pools McFadden is calling for, Corlette said.

"The coverage is just extremely expensive, and many people found it unaffordable and went untreated," she said.

Most polls show a thin majority of Americans opposes the Affordable Care Act.

Still, Franken said he's convinced he can successfully campaign as a supporter of the law and its provisions that even McFadden would not do away with. In less than two weeks, he'll know if that holds true.

"I believe that I'm on the right side of this and I think that Minnesotans agree with me," Franken said.