News Feature | February 3, 2014

Republicans Offer Alternative Health Plan

Source: Health IT Outcomes
Christine Kern

By Christine Kern, contributing writer


Republican Senators propose repealing the ACA and offer alternative to save money

Three key Republican senators have proposed replacing Obamacare with a package of election-year proposals intended to lower health insurance costs while retaining some elements of the Affordable Care Act.

Reuters reported that Senators Richard Burr (R-NC), Tom Coburn (R-OK), and Orrin Hatch (R-UT) have released a legislative blueprint that some analysts suggest could provide the Republican Party with a much-needed vision for healthcare. Such a boost is necessary going into mid-term congressional elections that will determine party control over Congress in the final two years of the Obama presidency.

According to the Associated Press via ABC News, the plan is unique among congressional Republicans who vowed more than three years to "repeal and replace" the Affordable Care Act, but have focused almost exclusively on repealing it without advancing a comprehensive alternative.

Senator Burr stated, "The American people have found out what is in Obamacare - broken promises in the form of increased healthcare costs, costly mandates and government bureaucracy. They don't like it and don't want to keep it."

Although the proposal repeals all of the tax increases under Obamacare, including one on medical devices and another on high-cost insurance plans, it would impose a new one by limiting the tax exemption that individuals are allowed to take for the cost of their health insurance premiums. Like earlier Republican initiatives, the approach would make consumers responsible for more of their medical bills, using health savings accounts funded with pre-tax dollars that could be used to pay for insurance premiums as well as healthcare services.

The plan would maintain two key provisions of the Affordable Care Act by banning lifetime limits on insurance benefits and allowing adult children to stay on their parents' health plans until age 26. However, it would reduce government subsidies to lower-income people to buy private insurance, allow insurers to charge older people more and protect the sick against insurance market discrimination only if they remain continuously insured.

The CARE Act would be funded by new federal taxes on employer-sponsored health plans, which are currently excluded from taxation. Under the Republican proposal, 35 percent of a plan's value would be taxable for employees while employer tax deductions remained unchanged. It would also leave in place an estimated $700 million in reduced payments to Medicare, while lawmakers seek a separate bipartisan agreement on how to reform the program for the elderly and disabled.

The White House response to the proposal was dismissive. White House spokesman Jay Carney said, "This looks very much like just another repeal proposal, another attempt to raise taxes on the middle class, to keep uninsured Americans with pre-existing conditions locked out of the market, to raise costs on seniors and to take away Medicaid from the millions of Americans."

Analysts suggest the proposal could help Republicans in the coming months. "It gives them an opportunity to talk about these things in a more positive way than just repeal and replace," said Joseph Antos of the American Enterprise Institute, a conservative Washington think tank.

Obamacare is already a major Republican campaign issue, with the goal of leveraging the law's unpopularity into active voter support in November. Republicans voted to repeal, defund or dismantle the law more than 40 times in the House of Representatives.

Of likely U.S. voters, 43 percent view Obamacare at least somewhat favorably, while 52 percent have an unfavorable view, according to a Rasmussen Reports poll released on Monday.