Special Report: Senate Finance Committee

Here’s How the GOP Wants to Replace Obamacare

Finance Committee Republicans have been working for a while on a new health care plan. But first they need the Supreme Court to rule against the current law.

WASHINGTON  - JUNE 7:  Senator Richard Burr (R-NC) speaks with reporters after a cloture vote on Capitol Hill June 7, 2007 in Washington, DC.  The Senate voted against cloture for a second time today on S1348, the current immigration reform bill.  (Photo by Brendan Smialowski/Getty Images)
National Journal
March 25, 2015, 5:30 p.m.

First the Su­preme Court has to over­turn Obama­care’s fed­er­al sub­sidies. Then the Re­pub­lic­ans will go to work.

No one out­side the Court’s walls knows if it will is­sue a dev­ast­at­ing blow to the Af­ford­able Care Act, but Re­pub­lic­ans have a strategy to cap­it­al­ize on it just in case. They feel fairly con­fid­ent thatKing v. Bur­wellwill go their way—i.e., that the justices will say the law does not al­low sub­sidies for people who buy in­sur­ance on fed­er­al ex­changes —and they have a re­sponse ready.

The chances that Re­pub­lic­ans will ac­tu­ally agree amongst them­selves on an Obama­care re­place­ment are ex­ceed­ingly slim, and even if they man­age that and get something ap­proved by both cham­bers of Con­gress — which may re­quire the use of the spe­cial budget tool known as re­con­cili­ation — an aw­ful lot of things would have to go right for their plan to work.

Those steep odds haven’t dis­suaded the GOP from at least try­ing. Their first step will be to pro­pose freez­ing en­roll­ment ex­actly where it is. No one would be forced to drop an ACA health plan even if they can’t get sub­sidies to pay their premi­ums. Con­gress will provide, Re­pub­lic­ans say. At least for 18 months or so. The next step comes in 2017, when a new pres­id­ent is ushered in. Un­der this mas­ter plan, a GOP Con­gress will then put forth a mar­ket-based health care pro­pos­al. In the­ory — and it’s a the­ory Demo­crats would cer­tainly dis­pute — it won’t mat­ter wheth­er the White House is oc­cu­pied by a Re­pub­lic­an or a Demo­crat. The GOP’s Obama­care “re­place­ment” will be the only solu­tion avail­able.

This is the health care scheme that has come to­geth­er piece by piece as the Obama­care foes in Con­gress have ma­tured from tan­trum-throw­ers to cal­cu­lat­ing strategists. The over­all goal hasn’t changed—to get rid of Obama’s health care law. But the think­ing about what to of­fer in its stead is only now start­ing to gel in the GOP caucus.

The nug­get of the Re­pub­lic­ans’ an­swer to the ACA was hatched eight years ago, well be­fore Obama­care was con­ceived. Two vet­er­an con­ser­vat­ives—Sens. Richard Burr of North Car­o­lina and Tom Coburn of Ok­lahoma—be­lieved it should be just as easy for an in­di­vidu­al to buy health in­sur­ance as it is for a work­er to sign up with an em­ploy­er. The two law­makers worked stead­ily on a pro­pos­al to use tax cred­its, cost-cut­ting tools like high-risk pool shar­ing, and health sav­ings ac­counts to bring down premi­ums.

Burr re­cently de­scribed the pro­pos­al this way: “We’ve bal­anced the dif­fer­ence between em­ploy­er-based cov­er­age and in­di­vidu­al-based cov­er­age.”

Burr kept re­fin­ing the pro­pos­al even after Coburn re­tired in 2014. He sought sup­port from Sen. Or­rin Hatch of Utah well be­fore it be­came clear that Hatch would chair the Sen­ate Fin­ance Com­mit­tee. “Or­rin has al­ways had a deep in­terest in health care,” Burr toldNa­tion­al Journ­al.“He has a very tal­en­ted health care staff. We went in there and said, ‘Hey, shoot holes in this. And if you can’t find any, co­spon­sor with us.’ And they couldn’t find any­thing.”

Lo and be­hold, Hatch signed on. The Re­pub­lic­ans took con­trol of the Sen­ate, and Hatch be­came chair­man of the com­mit­tee through which all health care bills must pass. “Yeah, we got lucky,” Burr said with a smile.

Hatch and Burr are now the two prin­cip­al op­er­at­ors of the “re­place ACA” scheme. They got a big polit­ic­al boost earli­er this year when Rep. Fred Up­ton, the House En­ergy and Com­merce Com­mit­tee chair­man, signed on. Up­ton’s thumbs-up showed that the GOP means busi­ness on health care, even in the bois­ter­ous House. Up­ton’s spon­sor­ship also signaled a shift among row­di­er House Re­pub­lic­ans away from their laser fo­cus on ACA re­peal to­ward a meas­ured solu­tion. Im­port­antly, it showed that the GOP is will­ing to ad­mit that the health care sys­tem needs some at­ten­tion from Con­gress.

Fin­ance Com­mit­tee Re­pub­lic­ans also see Up­ton’s par­ti­cip­a­tion as a way to show off the power they can wield when the House and Sen­ate lead­ers of cor­rel­at­ing com­mit­tees work closely to­geth­er. In the past, Sen­ate Fin­ance chair­men and House En­ergy and Com­merce chair­men some­times seemed like they were on sep­ar­ate plan­ets, even if they were in the same polit­ic­al party.

Burr says Up­ton’s sup­port is no ac­ci­dent. “Fred and I were on En­ergy and Com­merce to­geth­er,” he said, re­fer­ring to his own time in the House. “This be­gins to cre­ate a plat­form with­in the House that we’re able to get people fa­mil­i­ar with the struc­ture of the plan.”

The Burr/Hatch/Up­ton pro­pos­al puts on dis­play the GOP’s fun­da­ment­al philo­sophy on health care. Not sur­pris­ingly, it is dia­met­ric­ally op­posed to Demo­crats’ views. Re­pub­lic­ans be­lieve that if you make cov­er­age af­ford­able, more people will buy it. They do not be­lieve in man­dat­ing that people have in­sur­ance or dic­tat­ing how health plans should look, as the ACA does. And they want states to take the lead in mak­ing in­di­vidu­al plans easi­er for people to get. In keep­ing with their small-gov­ern­ment credo, they want the fed­er­al gov­ern­ment’s role in health care to be much smal­ler than it is now.

Ac­know­ledging con­sumers’ de­sire not to get gouged, Re­pub­lic­ans have built a few Obama­care-like pro­tec­tions in­to their plan. For ex­ample, no one could be denied cov­er­age based on a preex­ist­ing con­di­tion. Peri­od. No as­ter­isk. Par­ents would be able to cov­er their chil­dren un­til age 26. (That one does have an as­ter­isk: States could opt out.) In­sur­ance com­pan­ies would be barred from kick­ing people off their plans if they make too many claims.

This is com­plex le­gis­la­tion with a lot of mov­ing parts, in­clud­ing shifts in the tax code that might make some tax pur­ists nervous. That’s why Burr says Re­pub­lic­ans are simply lay­ing the ground­work now for 2017 im­ple­ment­a­tion. Even though it’s hard to ima­gine Con­gress passing ma­jor le­gis­la­tion ever again, Burr is con­fid­ent that’s how this will go down. “We got to where we are through a pro­cess of elim­in­a­tion. It’s not that we woke up one day and said, ‘Gosh, here’s the mod­el that we need to use.’ It was be­cause we elim­in­ated everything else,” he said.

Now Re­pub­lic­ans just need to wait for one last elim­in­a­tion. It will have to come from the Su­preme Court.

This art­icle has been up­dated.

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