When Republicans in Congress next vote on legislation to repeal the Affordable Care Act, they’ll be able to point to a substitute for President Obama’s health care reform law.
Except that the alternative they can point to has, by and large, already been circulating in Congress for a year, and it hasn’t gotten very far — even among Republicans.
Congressional Republicans are starting to confront the reality that it’s on them to develop an alternative to Obamacare if they continue to insist on repealing and undermining it. But an alternative put forward last Wednesday by GOP Sens. Orrin Hatch and Richard Burr and U.S. Rep. Fred Upton is inferior to the law that’s been on the books for almost five years.
Called the Patient CARE Act, it’s a replacement that guarantees a lower level of coverage from plans purchased on the individual market and relies on low-income consumers to pick up more of the cost of care. At the same time, it attempts to retain some of Obamacare’s more popular provisions.
We believe the Obamacare debate should move beyond talk of its repeal and replacement to a more productive discussion about how the law can be genuinely improved to ensure parts of it are less complicated to administer (such as the employer mandate) and plans’ provider networks are more transparent. But members of Congress clearly aren’t at that point yet, so let’s evaluate the Obamacare replacement before them.
It relies on a similar mechanism as Obamacare to insure those with low incomes: financial support to make coverage through individual market plans more affordable. But the help would be less generous, and it would be available to fewer people. Plus, the Republican bill dumps the Medicaid expansion designed to cover those with very low incomes. The bill even transitions Medicaid to a system that caps funding to the states — a change that potentially leaves state budgets entirely on the hook for major, unpredictable expenses.
Burr, Hatch and Upton’s alternative also dumps Obamacare’s federal online exchange, healthcare.gov, and it largely guts the standards Obamacare has required from individual market plans to ensure they offer a reasonable level of coverage without charging exorbitant deductibles and out-of-pocket costs. Rather than keeping Obamacare’s essential health benefits — such as no-cost preventive care — in place, the GOP alternative returns most regulatory power over insurance plans to the states, which could choose to keep such standards in place or change them. It also allows insurers to charge older consumers up to five times more than younger consumers; Obamacare allows insurers to charge older consumers three times more.
The GOP alternative reverses some of Obamacare’s key components aimed at ensuring more people have coverage, such as the individual and employer mandates. At the same time, it retains some components that have proven popular.
Insurance companies still wouldn’t be able to impose lifetime limits on a patient’s coverage, and young people could remain on their parents’ insurance plans until they turn 26 — unless a state decides to dump that provision. The bill also tries to retain some peace of mind for people with pre-existing health conditions. It doesn’t keep in place Obamacare’s prohibition on insurers denying coverage to those with such conditions, but the Burr-Hatch-Upton bill would guarantee coverage to someone with a pre-existing condition as long as he or she has remained insured for the past 18 months.
Burr, Hatch and Upton haven’t released cost estimates on their legislation, but the trio recognizes they need one Obamacare provision Republicans have strongly opposed to pay for it: The bill keeps in place Medicare changes — such as reduced hospital payments, measures to reduce hospital readmissions and less federal support for Medicare Advantage coverage offered through private insurers — that are credited in part with extending the Medicare program’s solvency. The bill, while repealing Obamacare’s taxes on medical devices and prescription drug manufacturers, would also subject a portion of employees’ health benefits to the income tax, though the provision in this year’s bill wouldn’t hit as many workers as last year’s version of the legislation.
It’s a step in the right direction to see Republicans insisting on the need for an Obamacare replacement, but this alternative is inadequate at best.