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.

What We're Following See More »
AVOIDS SHUTDOWN WITH A FEW HOURS TO SPARE
Trump Signs Border Deal
3 days ago
THE LATEST

"President Trump signed a sweeping spending bill Friday afternoon, averting another partial government shutdown. The action came after Trump had declared a national emergency in a move designed to circumvent Congress and build additional barriers at the southern border, where he said the United States faces 'an invasion of our country.'"

Source:
REDIRECTS $8 BILLION
Trump Declares National Emergency
3 days ago
THE DETAILS

"President Donald Trump on Friday declared a state of emergency on the southern border and immediately direct $8 billion to construct or repair as many as 234 miles of a border barrier. The move — which is sure to invite vigorous legal challenges from activists and government officials — comes after Trump failed to get the $5.7 billion he was seeking from lawmakers. Instead, Trump agreed to sign a deal that included just $1.375 for border security."

Source:
COULD SOW DIVISION AMONG REPUBLICANS
House Will Condemn Emergency Declaration
3 days ago
THE DETAILS

"House Democrats are gearing up to pass a joint resolution disapproving of President Trump’s emergency declaration to build his U.S.-Mexico border wall, a move that will force Senate Republicans to vote on a contentious issue that divides their party. House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) said Thursday evening in an interview with The Washington Post that the House would take up the resolution in the coming days or weeks. The measure is expected to easily clear the Democratic-led House, and because it would be privileged, Senate Majority Leader Mitch McConnell (R-Ky.) would be forced to put the resolution to a vote that he could lose."

Source:
MILITARY CONSTRUCTION, DRUG FORFEITURE FUND
Where Will the Emergency Money Come From?
3 days ago
THE DETAILS

"ABC News has learned the president plans to announce on Friday his intention to spend about $8 billion on the border wall with a mix of spending from Congressional appropriations approved Thursday night, executive action and an emergency declaration. A senior White House official familiar with the plan told ABC News that $1.375 billion would come from the spending bill Congress passed Thursday; $600 million would come from the Treasury Department's drug forfeiture fund; $2.5 billion would come from the Pentagon's drug interdiction program; and through an emergency declaration: $3.5 billion from the Pentagon's military construction budget."

Source:
TRUMP SAYS HE WILL SIGN
House Passes Funding Deal
3 days ago
THE DETAILS

"The House passed a massive border and budget bill that would avert a shutdown and keep the government funded through the end of September. The Senate passed the measure earlier Thursday. The bill provides $1.375 billion for fences, far short of the $5.7 billion President Trump had demanded to fund steel walls. But the president says he will sign the legislation, and instead seek to fund his border wall by declaring a national emergency."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login