Republican Alternative to Obamacare Relies on Repeal

Rep. John Fleming, R-La., once operated 30 Subway restaurants and had a stake in 130 UPS stores, from Mississippi to Texas.
National Journal
Clara Ritger and Sophie Novack
Add to Briefcase
Clara Ritger Sophie Novack
Sept. 22, 2013, 8:50 a.m.

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.”

What We're Following See More »
Clinton Foundation Staffers Steered Biz to Bill
7 hours ago

"Two chief fundraisers for the Clinton Foundation pressed corporate donors to steer business opportunities to former President Bill Clinton as well, according to a hacked memo published Wednesday by WikiLeaks. The November 2011 memo from Douglas Band, at the time a top aide to Mr. Clinton, outlines extensive fundraising efforts that Mr. Band and a partner deployed on behalf of the Clinton Foundation and how that work sometimes translated into large speaking fees and other paid work for Mr. Clinton."

House Investigators Already Sharpening Their Spears for Clinton
17 hours ago

House Oversight Committee Chairman Jason Chaffetz plans to spend "years, come January, probing the record of a President Hillary Clinton." Chaffetz told the Washington Post: “It’s a target-rich environment. Even before we get to Day One, we’ve got two years’ worth of material already lined up. She has four years of history at the State Department, and it ain’t good.”

Clinton Super PAC Enters the House Fray
21 hours ago

Priorities USA, the super PAC aligned with the Clinton campaign, which has already gotten involved in two Senate races, is now expanding into House races. The group released a 30 second spot which serves to hit Donald Trump and Iowa Rep. Rod Blum, who is in a tough race to win re-election in Iowa's first congressional district. The super PAC's expansion into House and Senate races shows a high level of confidence in Clinton's standing against Trump.

House to Vote on Iran Sanctions Renewal in Lame Duck
21 hours ago

Republican House leaders are planning on taking up a vote to renew the Iran Sanctions Act as soon as the lame-duck session begins in mid-November. The law, which expires on Dec. 31, permits a host of sanctions against Iran's industries, defense, and government. The renewal will likely pass the House, but its status is unclear once it reaches the Senate, and a spokesman from the White House refused to say whether President Obama would sign it into law.

Trump Stops Holding Fundraisers to Benefit GOP
21 hours ago

Just two weeks from Nov. 8, Donald Trump's campaign is not scheduling anymore high-dollar fundraisers, the type which usually benefit the Republican Party as a whole. The move comes as a surprise and could be a big blow to the GOP's turnout operations. Many down-ballot candidates are relying on the party apparatus to turn out voters in their districts and/or states, something that could be compromised. The last formal fundraiser occurred on Wednesday, Oct. 19.


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.