This week, House Republicans released their proposed budget, which would repeal Obamacare “in its entirety.” This time, though, they have a plan for replacing it.
Reps. Paul Ryan (R-Wis.), John Kline (R-Minn.), and Fred Upton (R-Mich.) recently offered a proposal that will move the United States away from Obamacare toward a system that actually cuts health costs and improves patient care. In other words, it will do what Obamacare promised but failed to deliver. And it couldn’t be timelier.
The U.S. Supreme Court recently heard arguments in King v. Burwell, a case that could prove fatal to President Obama’s signature law. The plaintiffs in King argue that the federal government does not have the authority to give tax credits to Americans who purchase coverage through the federally operated HealthCare.gov exchange.
Obamacare’s text states that such subsidies are only available through “an Exchange established by the State.” But the IRS simply decided that it had the authority to allow them in both state and federal exchanges.
Should the high court rule against the law, the premiums of more than 7 million Obamacare enrollees in 37 states would skyrocket. Many would be unable to afford health insurance.
Ryan, Kline, and Upton have outlined a plan that will protect these families by offering those in the affected states an “off-ramp from Obamacare.”
The first step is to free states from Obamacare’s costly employer and individual mandates as well as its essential health benefits
requirements. These requirements sharply raise the cost of insurance. According to online marketplace HealthPocket, Obamacare has pushed premiums up by as much as 78 percent.
By eliminating Obamacare’s one-size-fits-all approach to what insurers must cover, the Ryan-Kline-Upton plan would immediately make insurance more affordable. Folks would have the freedom to pick the plan that best fits their needs and budget.
To further lower prices, this “off-ramp” would allow consumers to buy insurance across state lines. Every state requires policies to cover a different mix of benefits. Those with fewer regulations tend to have cheaper insurance policies.
By allowing consumers to shop around nationwide, the Ryan-Kline-Upton plan will vastly increase competition. That will result in lower costs and better-quality health care.
In addition to making insurance cheaper, the GOP plan would replace Obamacare’s Rube Goldberg subsidy scheme with a straightforward tax credit.
Under Obamacare, subsidies are only available to those who buy government-approved insurance through a government-run exchange. The subsidy is based on a complex formula that includes the poverty rate, a family’s expected income for next year, and the cost of the second-lowest “silver” plan in their area.
The Ryan-Kline-Upton plan would instead offer an age-based tax credit good for any individual insurance plan sold in the market — not just those government regulators deem acceptable. The credit would be refundable. In other words, even low-income Americans who owe little or no federal income tax could receive the full value of the credit. It would also be advanceable — Americans would be able to claim it when they purchased insurance instead of when they filed their taxes.
The House GOP plan would also protect Americans with pre-existing conditions. It bars insurance companies from charging more for pre-existing conditions or denying coverage to anyone who maintains continuous coverage. In other words, anyone who renews their insurance each year would be guaranteed coverage.
Such an arrangement offers the young and healthy a strong incentive to buy insurance today. That’s a much better approach than mandating coverage by force.
Or as the three Congressmen put it, the approach puts “Americans, not Washington, in the driver’s seat.”
The Center for Health and Economy has reviewed GOP plans similar to the one advanced by the three Congressmen and concluded that they could cut premiums anywhere from 7 percent to 17 percent, cover almost nine million more people, improve access to providers, and cut 10-year deficits by as much as $416 billion.
The president’s backers have long held that the GOP has no health reform plan to put in Obamacare’s place. That’s no longer the case. The only question is whether they’ll get the chance to enact it.