How the GOP’s ObamaCare plans stack up

Experts say the proposals floated by Republicans in response to the looming Supreme Court ruling on ObamaCare could lead to higher premiums, but also create improvements in the healthcare system over time.

Congressional Republicans have for weeks been debating what they will do if the Supreme Court rules against the Obama administration in King v. Burwell. A defeat for the law could strip insurance subsidies from 6.4 million people.

{mosads}While they have yet to settle on a final proposal, House Republican leaders on Wednesday briefed members on a plan that would repeal ObamaCare’s individual and employer mandates, while giving states a choice between keeping ObamaCare subsidies or receiving a block grant to spend as they see fit.

The plan would end in two years, repealing ObamaCare and giving a new president a chance to enact a Republican alternative.

Senate Republicans, meanwhile, are considering something similar to a plan from Sen. Ron Johnson (R-Wis.) that would extend the subsidies until 2017 while repealing the insurance mandates.

Some experts say the push to repeal the mandate for buying insurance could be problematic. Without it, they warn, insurance premiums would likely skyrocket because people could wait until they are sick to buy coverage.

The Congressional Budget Office has estimated that repealing the individual mandate would increase insurance premiums by 15 to 20 percent.

“You can’t have a system where sick people can sign up and healthy people can take a pass without consequences,” said Robert Laszewski, president of Health Policy and Strategy Consultants, a consulting firm.

Other healthcare experts say the importance of the individual mandate is exaggerated.

“The individual mandate didn’t do that much to get people to sign up, it was the subsidies,” said Joseph Antos, a scholar at the conservative American Enterprise Institute. “Will the insurance market collapse without the mandate? Of course it won’t.”

Antos cited a study from the consulting firm Avalere Health that found the penalty for violating the insurance mandate might not be high enough to convince healthy, middle-income people to buy insurance.

The study noted that an enrollment period giving people a second chance to sign up and avoid the penalty this spring attracted a “lackluster” 68,000 participants.

Republican proposals to repeal some of ObamaCare’s regulations, such as the essential benefits rule that require insurance plans to cover certain things, could allow insurers to sell cheaper plans with less comprehensive coverage.

“Without the essential benefits [rules], the insurance companies would offer a greater variety of products,” Antos said. “That would rationalize the market a little bit.”

Edwin Park, vice president for health policy at the left-leaning Center on Budget and Policy Priorities, disagreed, and said the easing of regulations would not make up for the loss of the mandate.

“That might bring down premiums somewhat, but not in any way to make people purchase coverage,” he said.

A central feature of the House Republican plan is allowing states to receive block grants equal to the amount of money their residents are now getting in ObamaCare subsidies. That move is intended to give states flexibility to come up with their own coverage system. The grants would begin next year, after a “safe harbor” period extending the ObamaCare subsidies through the end of 2015.

Experts say the idea has promise, but could be difficult to implement because states might not be able to pass a new system through their legislatures and set them up by the beginning of 2016.

“It seems to get the IRS out of the middle of people making decisions about what kind of insurance to buy,” Antos said. 

However, he noted: “This is not something that would just suddenly happen.”

Laszewski, the healthcare consultant, pointed to the rollout of ObamaCare as an example of how long it would take for states to set up their own systems under which to disburse the block grants in some way.

“The 14 states that did implement their own [ObamaCare] exchanges took two years and $200 million,” he said. But he added of the grants: “Is it a good idea in theory? Absolutely.”

It also remains to be seen whether any of the Republican plans will make it into law if the administration loses in court.

President Obama has made clear that he would not sign healthcare legislation that makes major changes like the repeal of the individual mandate. He has suggested the healthcare law could be repaired with a simple “one-sentence fix.”

Republicans say they will have a plan they can point to as their solution, even if Obama might not sign it.

“We recognize there will be a messaging war, and so the question is, how do we position ourselves, how do we posture ourselves for what will be a messaging war?” said Rep. John Fleming (R-La.). “Most of us are skeptical the president will sign anything we send him.”