A group of leading Republican lawmakers on Wednesday proposed an outline for replacing the Affordable Care Act in a bid to advance traditional conservative healthcare goals, including deregulating health insurance, curtailing Medicaid spending and changing how health plans are taxed.
The outline, which parallels a blueprint that senior GOP senators proposed in the last Congress, is not a formal bill. That precludes the nonpartisan Congressional Budget Office from calculating its cost and its precise effect on the nation’s healthcare system.
Senior Republican congressional aides said there were no plans to hold formal hearings to develop the proposal, a key step that would require more detailed analyses.
But the outline by Senate Finance Committee Chairman Orrin G. Hatch (R-Utah), House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Sen. Richard M. Burr (R-N.C.) puts down a marker as Republicans wrestle with how to counter criticism that they have no alternatives to the 5-year-old health law that millions of Americans have come to rely on.
The plan, titled the Patient Choice, Affordability, Responsibility and Empowerment Act, sets out ambitious goals.
It would guarantee coverage to Americans with preexisting medical conditions, though the assurance is more limited than what the current law offers because it protects only consumers who maintain continuous health coverage.
Like the current law, the Republican proposal would also offer subsidies to low-income Americans to help them buy health plans, a system that the plan’s architects say should ensure their program helps expand coverage, a central accomplishment of the Affordable Care Act.
In a move to control insurance premiums, the Republican blueprint would scrap most requirements on health plans in the current law, including mandates on what benefits they must offer and a prohibition on annual limits on coverage. (The plan maintains the current ban on lifetime limits on coverage.)
And the Republican outline would dramatically restructure the way the federal government funds state Medicaid programs for the poor, moving to a system of block grants that restrict federal expenditures and place fewer requirements on states.
“We can lower costs and expand access to quality coverage and care by empowering individuals and their families to make their own healthcare decisions, rather than having the federal government make those decisions for them,” Burr said.
At the same time, the plan would ditch several of the most unpopular features of the current law, including the requirement that Americans get coverage and a host of new taxes.
According to congressional aides, the Republican plan maintains hundreds of billions of dollars in Medicare cuts in the current law, which would be key to offsetting the cost of extending new subsidies to consumers.
The only major funding source in the plan is a new tax on employees who have high-priced employer-provided health plans worth more than $12,000 for individuals or $30,000 for families.
Whether such a system could work is unknown, as it is largely untested. By contrast, the Affordable Care Act was modeled on a popular program enacted by the state of Massachusetts.
Critics of similar proposals have noted that the more limited subsidies in the Republican plan probably would mean significantly higher costs for many consumers, particularly those with low incomes.
The Republican blueprint would provide aid only to people making up to three times the federal poverty level, as opposed to four times the poverty level as the current law allows.
Restricting Medicaid spending may force states to pare back their health safety nets. And moving to an entirely new system would probably force millions of consumers out of their current health plans, the same transition that Republican lawmakers have criticized the current law for doing.
“The plan would likely disrupt existing health insurance coverage — through Medicaid, the marketplaces and employer-sponsored insurance — for millions of people while making it much more difficult for millions more who are without health insurance today to gain it in coming years,” Edwin Park, a healthcare analyst at the left-leaning Center on Budget and Policy Priorities, wrote last year in a report on a previous plan.
Republican aides acknowledged there is little chance that their blueprint could become law until Obama leaves office.
But the plan’s authors indicated they planned to begin working with other lawmakers to develop it further.