by Sam F. Halabi, Scholar, O’Neill Institute for National and Global Health Law, Georgetown University and Associate Professor, University of Missouri School of Law
President Donald Trump is expected to devote at least part of his speech this evening to his vision for the replacement of Obamacare. It is therefore a good time to take stock of what alternatives GOP legislators have floated so far and what might end up getting stitched together to form the outline of such a vision.
On January 23, Senators Susan Collins (R-Maine) and Bill Cassidy (R- La.) introduced the Patient Freedom Act, which would let states that had opted into Obamacare keep their expansion dollars or, alternatively, offer subsidies for states to create an auto enrollment system for catastrophic coverage plans with bare bones preventative services also covered. Federal subsidies would be based strictly on enrollment, not income, and states could use federal subsidies to prefund health savings accounts that would cover some (no one knows how much) of the gap between $0 and the high deductibles charged under catastrophic plans. People could, of course, opt out of coverage.
On January 25, Senator Rand Paul (R-Ky.) introduced his Obamacare Replacement Act which would provide tax credits for health savings accounts, repeal the individual mandate and minimum coverage conditions, and loosen Obamacare’s already existing mechanism for “selling insurance across state lines.” Paul’s vision, consistent with his libertarian outlook, is to liberalize the individual insurance market so that consumers can purchase policies tailored to their needs or that consumer or other affiliated groups may leverage bargaining power through negotiations with insurance providers.
On February 10, a leaked version of a House bill (apparently without a catchy title), would repeal the individual mandate, subsidies based on people’s income, and all of the Obamacare taxes. It would reduce Medicaid spending and give states money to create high-risk pools for certain categories of people with pre-existing conditions. Starting in 2020, the federal government would extend tax credits based on age, not income. Insurers would be allowed to charge much more to cover older versus younger persons. Like Paul’s plan, it would eliminate minimum coverage requirements and, of course, defund Planned Parenthood. It would be paid for by limiting the tax deduction for generous group healthcare plans. Analogously to the individual mandate, it would provide a penalty for failing to maintain continuous coverage.