The GOP‘s ‘ObamaCare backup’ — ready if Supremes gut law
For five years, President Obama has ridiculed Republicans for not having “a meaningful alternative” to ObamaCare. The tables are turning.
Republicans announced a plan on Wednesday, just two weeks before the Supreme Court will hear a new, major challenge to the health law. If the president loses in court, he will have to deal with this GOP blueprint, not dismiss it.
The plan kills the major features of the Affordable Care Act, including mandates on individuals and employers, numerous taxes and the IPAB rationing board.
In their place, it offers tax credits for low-income citizens, more consumer choice, regulatory relief for employers and medical-malpractice reform to drive costs down.
Right now, it’s pie in the sky. Obama would veto it tomorrow.
But in a crisis, “the politically impossible becomes politically inevitable,” noted economist Milton Friedman. Whatever idea’s ready to go becomes the course of action.
On March 4, the Supreme Court will hear a challenge to ObamaCare subsidies offered in 36 states where consumers use HealthCare.gov. The court will announce its ruling in June — and could give us Friedman’s crisis.
The letter of the Affordable Care Act permits subsidies only in the 14 states that set up their own exchanges, not in the other 36.
If the president loses, 6.5 million people in those 36 states would have to pay the true cost of their “affordable” plans, in some cases quadruple. Only the sickest would keep paying, putting ObamaCare in a “death spiral” with premiums soaring and enrollment crashing.
On Wednesday, Health and Human Services Secretary Sylvia Burwell refused to say if the administration has a backup plan should the justices rule against it.
The same day, Republicans announced they do. Their “blueprint” — not yet a bill — is sponsored by powerhouse GOP Sens. Orrin Hatch (Utah) and Richard Burr (NC) and Rep. Fred Upto, (Mich.).
Other Republicans have ideas, but this blueprint has political heft and momentum.
The plan adopts some popular ObamaCare features: covering kids on parents’ plans ’til age 26, outlawing lifetime limits, guaranteeing coverage for people with pre-existing conditions in almost all circumstances and subsidizing coverage via tax credits for citizens earning up to $35,000 a year and families up to about $58,000. That takes care of most who now qualify for ObamaCare subsidies.
But where ObamaCare dictates, the blueprint allows choices.
ObamaCare forces you to have a one-size-fits-all “Washington knows best” benefit package. It’s like a law that the only car you can buy is a fully loaded sedan: no hatchbacks, no convertibles.
The Republican blueprint lets you decide whether to buy insurance and what kind — everything from a high deductible to a low-cost “mini-med.”
Obama didn’t invent mandates. New York lawmakers piled them on for years, forcing consumers here to pay exorbitant premiums. The blueprint removes federal barriers to people buying or selling plans across state lines — a huge win for New Yorkers.
Employers would have more choices, too. ObamaCare forces them to provide expensive, mandated benefits.
The Congressional Budget Office warns that this will prompt many to stop offering insurance, hurting 9 million to 10 million people. Only Washington, DC, could design an “employer mandate” that makes you lose your coverage at work.
Ending the mandate on employers with 50 or more full-time workers also halts the incentive to trim the workforce to below 50 or shift workers to part-time.
The GOP blueprint allows you to deduct the cost of your coverage up to $12,000 for individuals and $30,000 for families. People with generous on-the-job plans may have to pay tax on part of their coverage for the first time.
Even so, it’s better than ObamaCare’s 40 percent Cadillac tax on generous health benefits, scheduled to hit in 2018 and already roiling labor negotiations.
The plan funds Medicaid with block grants so states have flexibility to improve their programs.
And in every state, anyone eligible for Medicaid can apply the cash value of their benefit toward private coverage instead. Like a school voucher. As Friedman said, “free to choose.”
ObamaCare supporters shriek that millions will lose coverage if the court rules against the administration. In truth, more people will be harmed — including those 9 million to 10 million at risk of losing employer-provided coverage — if the law drags on as is.
And the GOP alternative “blueprint” shows that the party in charge of Congress is preparing better options and will not leave those now covered by ObamaCare to fend for themselves.