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NJ Daily

Republican Alternative to Obamacare Relies on Repeal

Rep. John Fleming, R-La.: "Obamacare is not fixable."(Wikimedia Commons)

September 22, 2013

Despite passing legislation in the House on Friday to defund the Affordable Care Act, Republicans aren't completely opposed to health care reform.

Some are saying the Obamacare repeal effort must be accompanied by a replacement proposal. Rep. Darrell Issa, R-Calif., said last week he wouldn't repeal "without viable replacements for many of the things that the Affordable Care Act chose to do."

That's why the Republican Study Committee in the House last week unveiled the American Health Care Reform Act, a plan designed to repeal Obamacare and replace it with "market-based solutions."

 

It's not the first ACA alternative the GOP has produced. In June, Rep. Tom Price, R-Ga. introduced the Empowering Patients First Act. It would provide insurance-premium tax credits based on income, similar to the ACA, but wouldn't outlaw discrimination against people with preexisting conditions. It has been referred to committee.

If the legislation sounds familiar, it's because Price sponsored it in the last two Congresses. It did not make it out of committee in either session.

The House GOP's latest plan is an omnibus package containing measures that failed to gain traction in the past. It has about 30 cosponsors. But a major stumbling block is that the bill is not drafted as a reform of the current law; it depends on a repeal that is going nowhere in the Senate.

"Obamacare is not fixable or reparable," said Rep. John Fleming, R-La. who worked with the RSC on the bill. "It's kind of like a skyscraper that was built on a terrible foundation. You would have to tear it down and start over."

Republican Study Committee Chairman Steve Scalise, R-La., called the bill a 180-degree turn from Obamacare. It would offer standardized tax deductions across income levels, while the ACA provides tax credits on a sliding scale, depending on age and income. Under the GOP plan, everyone would be given the same income- or payroll-tax deduction: $7,500 for individuals and $20,000 for families. For low-income taxpayers, the deduction would be up to the amount of their income taxes or payroll taxes owed.

The GOP plan would use the current individual market but allow consumers to purchase insurance across state lines. It also would allow small businesses to pool together to lower their risk and reduce insurance costs.

The ACA creates a separate marketplace—the exchange—where individuals are able to shop around for the best deal on coverage. However, insurers can opt out of participating in the ACA exchanges and only choose to serve the private market, which in some states has resulted in less competition than intended.

The plans also differ in their treatment of low-income individuals and those with preexisting conditions. Under the Republican plan, individuals not currently on Medicaid or Medicare would be buying their insurance on the existing individual market. The GOP belief is that market competition would drive premium costs down so there are no protections in place for lower-income individuals. While the ACA offers states the chance to expand Medicaid and provides higher subsidies for lower-income individuals, under the GOP plan, those individuals would rely on their standardized tax deductions.

The Republican plan, like the ACA, provides some protections for people with preexisting conditions. But unlike the ACA, which sends these individuals to the exchange, the GOP plan reinstates the state high-risk pools and expands federal support to $25 billion over 10 years, while capping their premiums at 200 percent of the average premium in the state.

Republicans who worked on the bill said their proposed structural changes address what they see as the biggest problem in the American health care system: costs. Among the provisions are a cap to the total damages for medical liability for doctors and a repeal to the federal antitrust exemption for health insurers in an effort to break up monopolies and increase competition in the market.

To appease conservatives, the GOP bill eliminates tax increases, which in the ACA fund the subsidies that make coverage affordable for low-income Americans. According to Rep. Phil Roe, R-Tenn., Scalise insisted that "you can't have any mandates in this bill. You can't raise taxes. You've got to reform the tax code, but there can't be any subsidies involved."

"That's pretty limited in what we can do," Roe added. "I think within those parameters, we came up with a pretty good bill."

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