Republican leaders are patting themselves on the back for the rollout of what they’re portraying as their Obamacare replacement plan. The policy paper, which consists of a broad set of aspirations without any dollar amounts or legislative mechanics, promises to slow the growth of health care costs through caps on government programs and on the tax breaks currently offered on employer-provided health plans. It does not, however, make any guarantees of universal coverage, nor does it provide enough details to assess its impact on the federal deficit or how Republicans plan to pay for what they’re promising. Many of the proposals have been trotted out before and have their own downsides when looked at in a standalone fashion.
Here’s what you need to know about the “new” approach:
While Republicans have voted to repeal Obamacare dozens upon dozens of times, their efforts to unite around a comprehensive replacement have been unsuccessful. Piecemeal GOP bills have been proposed here and there in the six years since the Affordable Care Act passed, but with little consensus or legislative momentum, and anytime Republicans were called upon to act pro-actively in health care policy, they devolved into intra-party squabbles.
Wednesday’s outline also comes as part of House Speaker Paul Ryan’s (R-WI) “A Better Way” agenda, a series of policy papers promised by Ryan when assumed the speakership that have taken on the additional purpose of serving as counter-messaging to Donald Trump’s free-wheeling presidential campaign.
According to a senior GOP House leadership aide who spoke to reporters on a press call Tuesday, the health care policy paper was pieced together by the chairmen of the House Ways and Means Committee, the Energy and Commerce Committee, the Education and Workforce Committee and the Budget Committee. It is unclear whether their approach would receive caucus-wide support if Republicans had the opportunity to legislate it.
The GOP paper vows to repeal Obamacare. Full stop. In its place, Republicans would offer Americans a tax credit that would increase over age and time to help them afford coverage in the place of the current ACA subsidies — which vary according to income level and premium rates. Republicans would also end Obamacare’s individual and employer mandates. As for the mandated federal and state exchanges created by Obamacare, they would be gone, too. Individuals seeking plans would have to use private exchanges like the ones the aide said are “up and running now” or a state could chose to run its own exchange.
It would also scrap Obamacare’s Cadillac tax (the implementation of which has already been delayed) in favor of a cap on the exclusion employee health benefits have from taxes.
Given the Ryan’s campaign as House Budget Committee chair to dismantle entitlement programs, it’s no surprise the health care approach he is now pitching also makes fundamental changes to Medicare and Medicaid.
The GOP Obamacare replacement would roll back the ACA’s Medicaid expansion, and turn the broader program into either a block grant or a per capita allotment that would be capped. It would also allow states to put more conditions on receiving the benefits, such as a work requirements — conditions that are now prohibited by the federal government.
As for Medicare, Republicans would partially privatize the program — giving recipients the choice to obtain private health plans for which they would receive a capped government subsidy or the traditional program — while gradually raising the eligibility age to 67.
The GOP proposal holds on to one of Obamacare’s most well-liked aspects — that it lets young people to stay on their parents’ plan until their 26. But the ACA’s other goals are put into question by Republicans’ loosening of various regulations that allowed the law to achieve them.
Rather than ban the denial of coverage for pre-existing conditions, as the ACA currently does, Republicans would put into place a continuous coverage system that would prohibit insurers from raising premiums for pre-existing conditions as one switches from plan to plan, but would allow such hikes if an individual drops coverage for a period by his or her own choice.
Those with high medical costs could also opt-in to high risk pools, a popular idea in conservative health policy circles, which would be subsidized by $25 billion in federal funds over a 10-year period. Notably, conservative health policy experts are already saying that funding is not adequate.
Older consumers could see their premiums rise under the Republican version of Obamacare, as it widens the current premium ratio from 3:1 (meaning the most expensive premium rate can only be three times more expensive than the cheapest rate) to 5:1.
The Republican paper also allows insurers to sell plans across state lines, a commonly touted GOP proposal that health policy experts say could cause insurers to flock to the states with the least regulations while throwing off insurers’ risk pools.
At 37 pages, Wednesday’s policy paper is more extensive than the usual statement of principles put out by Republicans, but it is still lacking key details when it comes to legislative specifics.
The GOP aide on the press call Tuesday for instance said it would be up to legislative committees to “litigate” the size of plan’s caps as well as its tax credits — which the paper promises will be “large enough to purchase the typical pre-Obamacare health insurance plan” — and how they’ll be doled out. He also said they didn’t “have any analysis” on the approach’s effect on premiums or job growth, but that “we believe that it would be double-digit” percentage drops in premiums. He also said there is no deadline planned for crafting the legislative.
As for the more essential question of what the GOP approach would mean for coverage rates and for the 20 million people have received insurance because of Obamacare, the aide also punted:
“You’re getting to the dynamic effect of the plan and we can’t answer that until the committees start to legislate,” he said.