A Republican Alternative to the Affordable Care Act

Almost four years after the enactment of the Patient Protection and Affordable Care Act, three Senate Republicans have unveiled their own version of a health care reform bill. ​The measure, introduced Monday by Senators Richard Burr (N.C.), Tom Coburn (Oklahoma) and Orrin Hatch (Utah), contains some similarities to the ACA, but (as one would expect) a number of differences as well.

As with the ACA, low- and middle-income Americans would receive tax subsidies to help them buy insurance. Those who decide not to buy insurance would also face potential financial pain. However, rather than a tax penalty (which is the case under the ACA), the Republican plan would permit insurers to charge them more for pre-existing conditions when they finally do buy coverage. Insurance carriers would not be able to exclude pre-existing conditions or charge more for them for individuals who maintain continuous coverage.

The Republican plan does away with the essential health benefits requirement and the exchanges, and it would permit carriers to charge older plan subscribers more than the ACA allows. It also provides a vastly more limited expansion of Medicaid -- only pregnant women and children living below the poverty line would be newly eligible, whereas the ACA expands eligibility to everyone with incomes below 133 percent of the poverty line.

The Republican plan would get rid of the various taxes that the ACA uses to cover the cost of expanded coverage and replaces them them with a new limitation on the income tax deduction for employer-sponsored coverage. Employers would be able to deduct an amount equal to 65 percent of the premium for the average health insurance plan.

The Congressional Budget Office has not yet scored this proposal (the sponsors just announced it on Monday,) so we don't have an estimate as to how many people would gain coverage under this system and whether it will increase or reduce the federal budget deficit.

For more details, visit:

• The Washington Post's Wonkblog summary
• The news release issued by the three senators, which includes links to FAQ's, a comparison with the ACA, and a detailed summary

So, what do you think of this proposal? Is it a good first step? A non-starter? Do you think it would achieve the goal of covering the uninsured? What do you think of individual pieces? My initial reaction is that I don't like repealing the essential health benefits requirement. As with auto insurance, there should be a floor for health insurance coverage, a minimum level that consumers can reasonably expect. Under the old system, it was way to easy for people to believe they had coverage only to find out that their policies didn't cover something like, oh, maternity care.

I'd love to hear your thoughts. Sound off in the comments.

Comments

[Bob Fancher]

I see it as starting the conversation. I have felt from the beginning once this was moving along, past the technology issues, the discussions could start on how to make it better. I think it may be a little early to make solid judgments on what is good or bad, and how the public will have reacted overall - which we will not know, probably, for another year or more. I think this is how it should work. ACA passed good or bad whatever you think. It is here. Now it is a reality so the discussion should start on what is good and can be made better, and what may be a problem and how we can make adjustments. Thanks for putting it out here Tim.

[Tim Dodge]

Bob,
Good points. I don't think any of the Republicans' ideas should be accepted or rejected out of hand until we have some idea of how they would affect the marketplace (with the exception of the essential health benefits requirement, for the reasons I stated above.) When the ACA passed, I assumed that in a few years there would be an "ACA Part II" to improve the original. That may yet happen.