GOP senators outline first Obamacare replacement plan
WASHINGTON — The GOP’s first Obamacare replacement proposal landed in the legislative hopper on Monday, as two Republican senators outlined their preferred alternative to the Affordable Care Act.
The move comes amid conflicting signals from Republicans about when and how they will dismantle Obamacare and enact their own health care reform plan.
It also comes after President Trump, in one of his first actions, signed an executive order allowing federal agencies to unravel the ACA, which some fear could create even more uncertainty in an already shaky health insurance marketplace. Trump’s executive order was broad, and it’s not clear yet how his administration will implement it.
The proposal unveiled on Monday, sponsored by Sens. Bill Cassidy, R-La., and Susan Collins, R-Maine, could provide a starting point for the Obamacare replacement debate. But the Cassidy-Collins bill also includes several controversial provisions — including at least temporarily keeping all the tax increases included in Obamacare to pay for their alternative — that could be nonstarters within their own party.
In its draft form, the Cassidy-Collins bill would give states three options:
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• Keep the Affordable Care Act, with individuals and small businesses able to purchase insurance on state exchanges and low-income residents eligible for federal subsidies to cover the cost of that coverage. States that expanded Medicaid, a state-federal health program for the poor, would be able to maintain that.
• Give states most of the federal funding promised under Obamacare, the 95 percent of the subsidies and all the Medicaid expansion money, to create tax-free Health Savings Accounts for low-income residents. Those individuals could then use the money in their HSAs to purchase insurance and pay for their health care.
• Reject any federal assistance, risking a spike in the uninsured rates and uncertainty in their insurance markets.
“The power is best held by individuals and the states,” said Cassidy, a physician.
“California and New York, you love Obamacare, you can keep it,” the Louisiana Republican said, but states that want to try something different can choose among the other two options.
But the Senate’s top Democrat, Charles Schumer of New York, blasted the GOP plan as unworkable and an “empty façade” that would create chaos in the marketplace.
“Millions of Americans would be kicked off their plans, out-of-pocket costs and deductibles for consumers would skyrocket, employer-based coverage for working families would be disrupted, and protections for people with pre-existing conditions, such as cancer, would be gutted,” Schumer said. “It is nearly impossible to keep the benefits of the Affordable Care Act without keeping the whole thing.”
Ron Pollack, executive director of Families USA, a left-leaning health advocacy group, noted that bill promotes HSAs, which he said are designed to go with high-deductible catastrophic insurance plans, rather than more traditional coverage. And he said the states that choose to enact that option would receive fewer federal dollars--95 percent of the federal subsidies--which would inevitably translate into higher costs and reduced coverage for low-income Americans.
"This is a major step backwards," Pollack said.
Collins said it’s vital to get the Obamacare replacement debate started as soon as possible. The ACA is not working, she said, and the GOP’s talk about replacement, without providing specifics, is sowing further confusion for health care consumers and providers.
Collins suggested that Trump did not help matters with his executive order.
“The executive order is very confusing, and we really don’t know yet what the impact would be,” she said. “We need legislation.”
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In addition to the three broad options for states, the Cassidy-Collins bill would also preserve three of Obamacare’s most popular protections:
• Insurers would be barred from discriminating against those with pre-existing conditions;
• Insurers would be prohibited from enacting annual and lifetime caps in their coverage; and
• Young people would be allowed to stay on their parents plans until age 26.
Cassidy conceded that he had no commitment from Senate Majority Leader Mitch McConnell, R-Ky., to make his bill the primary vehicle for GOP leadership's replacement. “Republican leadership is waiting to see how this plays out,” he said.
He also sidestepped a question about whether his GOP colleagues would agree to any proposal that preserves even a scaled-back version of Obamacare — and that maintains the tax increases enacted under the 2010 Affordable Care Act. Many Republicans have advocated for a full repeal of the ACA — with the taxes a prime target.
Cassidy noted the health care industry agreed to those new taxes when Democrats were crafting the ACA, suggesting that those interests would go along with keeping them in place. And, he added, Republicans will need some source of revenue to pay for any alternative, although there is no consensus about where that revenue should come from.
The Cassidy-Collins bill, co-sponsored by two other Republicans, envisions a lengthy transition period, with states having two years to choose and implement their path forward. Even after 2020, when the bill would be fully in place, Cassidy said states could still choose to switch gears.
He portrayed his bill as the only measure that would fulfill all the promises Trump and Republicans in Congress have made about their replacement — including that no one who has insurance now will lose it, that they will keep the consumer protections, and that they will rein in the spiraling costs of premiums.
“There’s not many ways to get there,” Cassidy said. “… And none better than this.”