Senate & House Conservatives Oppose ‘Obamacare Lite’ Legislation; Have Better Replacement

Frank Camp,

Ever since the American Health Care Act was introduced by House Republicans, conservatives have been blasting it as “Obamacare Lite.”

Daily Wire Editor-in-Chief Ben Shapiro recently wrote about the bill’s five most critical faults. It “retains requirements that insurance cover people with pre-existing conditions,” making insurance into a “piggy bank” rather than a sustainable risk assessment business. It “creates a backdoor mandate” by allowing insurance companies to impose a 30% fee on those who allow their coverage to lapse for a period of time. It creates a new subsidy through age-based tax credits. It “subsidizes Medicaid,” and it would dole out “$100 billion to states over the next ten years to help cover those who are high risk and can’t afford insurance.”

While there are certainly good aspects of the bill, they are blighted by severe flaws.

Appearing on Fox News on March 4, Senator Rand Paul (R-KY) explained why conservatives in the Senate dislike the House bill:

“I’ll give you three instances that are in the bill that we [conservatives] object to:

There’s a new entitlement program. So, if you don’t pay any taxes, they’re going to give you back taxpayer money – a significant amount – and it’s going to be based in its growth over time, its inflation, about five percent a year. That’s a new entitlement program … those are the tax credits. It’s just not a Republican type of idea. To me, it’s a Democrat idea they’re trying to dress in Republican clothing.

… They’re keeping the Cadillac Tax – they’re kind of renaming it, and making it a little bit different, but essentially, if you have really good insurance, they’re gonna tax it.

And then the third thing they’re doing is they’re keeping a form of the individual mandate. You remember everybody complained? All Republicans said: ‘Individual mandate [is] terrible.’ They’re keeping it, but instead of you paying a penalty to the government, you’re gonna have to be – and it’s a mandate, it’s a law – you’re gonna have to pay a penalty to the insurance company.”

senategop_small Senate & House Conservatives Oppose 'Obamacare Lite' Legislation; Have Better Replacement Republicans

Senator Paul, Senator Ted Cruz (R-TX), as well as several conservative members of the House, have stated they will not vote for the Obamacare replacement bill as it currently stands.

Paul has said that he would prefer a clean repeal, and a simultaneous vote on a separate replacement bill. In fact, the Senator from Kentucky has drafted a replacement bill that, while not perfect, is multiple orders of magnitude better than the House’s American Health Care Act.

Paul’s bill, called The Obamacare Replacement Act (S. 222), would repeal the individual and employer mandate; allow “individuals who receive health insurance through an employer” to “exclude the premium amount from their taxable income”; and incentivize insurance purchasing outside of employment by “providing a universal deduction on both income and payroll taxes regardless of how an individual obtains their health insurance.”

The legislation would promote Health Savings Accounts (HSA) by giving “individuals the option of a tax credit of up to $5,000 per taxpayer for contributions to an HSA.”

Christopher Jacobs of The Federalist explains the difference between Paul’s tax credits and those enumerated in the House bill:

Paul’s bill provides a $5,000 tax credit to individuals who contribute to Health Savings Accounts (HSAs), but only to the extent such individuals have income tax liability. The Paul bill does include a refundable tax credit for health insurance premiums, but the refundable portion of the credit only applies up to the limit of an individual’s payroll taxes paid … the Paul bill would ensure that credits only apply to individuals with actual payroll and income tax obligations.

Paul’s plan would eliminate the cap on contributions to HSAs; it would also eliminate the requirement that “HSA participants be enrolled in a high deductible health care plan.” The legislation would tear down restrictions on insurance sales across state lines; it would establish “Independent Health Pools (IHP) in order to allow individuals to pool together for the purposes of purchasing insurance.” This way, churches, associations, and other entities could form collectives in order to bargain for insurance.

The bill would loosen Labor Department regulations, thus allowing more “small businesses to pool together across state lines … to purchase health coverage for their employees and their families.” These are known as Association Health Plans (AHP).

There are several other provisions in the bill proposed by Senator Rand Paul, including a controversial “two-year open enrollment period under which individuals with pre-existing conditions can obtain coverage.”

Despite some questionable policies, such as the open enrollment period and the HSA cap elimination, Paul’s bill attempts to readjust the focus of healthcare back onto patients and free markets.

There are many people on both sides of the aisle claiming that conservatives don’t have their own replacement; that they’re Chicken Littles who are panicking over nothing, and offering no alternative solutions. This is patently false. While the solutions conservatives are offering may also contain flaws, they are indeed being put forward, and on average, are much better than the House plan.

  • DrArtaud

    Here we go again, the same threadbare plans from the Republican party sure to turn the House over to the democrats in 2018.

    Mr. Ben (the rat) Shapiro, pretending he’s still a vital player. He said he was going to vote for hillary because four or eight years of her was less damaging to the Conservative (or Republican) party than Trump would be.

    Preexisting illnesses. Are we talking people first purchasing healthcare plans, or are we talking transitional plans? If I bought a market plan under obamacare, and I have specific illnesses, I will be displaced from the obamacare plan by it’s repeal and have to buy a plan directly from an insurer. That insurer will consider my illnesses “preexisting”, though in a classic sense they are not.

    If I get a job young, am covered by healthcare insurance, and am later diagnosed with disorder X, I’m not thrown off my plan, that’s part of the risk of selling insurance. If I leave my employer and go to another, my disorder X may be a problem with the new employer’s healthcare insurer.

    If someone bought obamacare, a program officially established by the U.S. Govt, and developed or already had disorder X, I cannot believe the Govt can willy nilly pull the rug out from under them and force them into standard healthcare plan that may refuse them for a disorder covered by the Govt plan. Though Rand Paul’s plan offers a 2 year open enrollment plan to consider this issue, this is not part of the Ryancare bill.

    All I keep hearing from the Conservative Republicans is that they are healthy, wealthy, and covered by a Govt plan that way surpasses the coverage they forced on us. I have yet to see figures offered by the Republicans in an easy to access form, but one chart under Ryancare has a 64 year old, $26,500/yr income, paying $1,700/yr under obamacare but will pay $14,000/yr by 2026 on Ryancare. Ryan’s plan has that 64 year old paying more than 50% of his yearly income for healthcare.

    And, drum roll please, Republicans want to raise the age for Medicare eligibility from the current 65 to 70, and they’ll allow insurers to charge older people 5X the premium amount younger people will pay, vs 3X under obamacare.

    And this incessant talk of Health Savings Accounts benefits younger, generally wealthier people. But not older, sick people on low fixed incomes. The Republicans want no tax credits for people who don’t pay taxes, but Republicans have consistently bailed-out the Savings and Loan banks, car companies, and much more, and despite their lofty words about adhering to Constitutional Rights and Limited Govt; will dole out trillions of dollars in the next bank bailout, or hundreds of billions for the next car company on the edge of going under; with reckless abandon.

    I have read again and again that the average American could not write a check for $500 in an emergency, yet the Republican plans assume that these people will write checks of this amount every month for healthcare. I’m incredulous that this is the best Republicans can do.