Congressional Libertarians Back Obamacare Replacement Act

Published April 5, 2017

Libertarians in Congress support the Obamacare Replacement Act over the American Health Care Act (AHCA), the health care plan House Republican leadership proposed before ultimately canceling a vote on it, due to inadequate support.

AHCA, backed by House Speaker Paul Ryan (R-WI) and approved by the House Budget Committee on March 16, would have given individuals refundable tax credits worth $2,000–$4,000 with which to buy health insurance. Leftover funds would have been deposited in HSA accounts. AHCA would have almost doubled HSA contribution limits, capped Medicaid expansion enrollment after 2019, and capped the federal funding states receive per Medicaid enrollee.

Libertarian-leaning Rep. Justin Amash (R-MI) tweeted on March 20, “While I’ve been in Congress, I can’t recall a more universally detested piece of legislation than this GOP health care bill.”

Fellow libertarian Rep. Thomas Massie (R-KY) called the bill “a stinking pile of garbage,” the Washington Examiner reported on March 7.

Let’s Make a Deal

Amash and Massie are members of the House Freedom Caucus, whose approximately three dozen members contributed to preventing ACHA from obtaining the 216 votes required to pass the chamber, which Republicans control 237 to 193.

Rep. Mark Sanford (R-SC), a member of the House Freedom Caucus, says Republicans should send President Donald Trump a much bolder Obamacare repeal bill than AHCA.

“We have a repeal bill that was fully supported by House and Senate Republicans and made its way to President Obama’s desk,” Sanford stated in a press release on March 7. “As Republicans, we decried the fact that he would veto it. Why would we now water down this same bill and send a new and weaker bill to President Trump?”

House Freedom Caucus Chair Rep. Mark Meadows (R-NC) said caucus members were “willing to move more than halfway to get a deal,” CBS News reported on March 17.

Libertarian Replacement Plan

Massie and Meadows are cosponsors of the Obamacare Replacement Act, which Sanford introduced in the House on February 17 and Sen. Rand Paul (R-KY), an ophthalmologist, introduced in the Senate in January.

The bill would repeal the tax on individuals who lack health insurance or whose insurance does not cover medical conditions the Affordable Care Act declares essential to insure against. Paul’s bill would also let individuals buy insurance through “Individual Health Pools,” which would be groups unassociated with their employers, and legalize the sale of insurance across state lines to increase competition and drive prices down.

Paul’s bill would eliminate caps on health savings account (HSA) contributions, which are $3,400 per person and $6,750 per family in 2017, and “provide individuals the option of a [non-refundable] tax credit of up to $5,000 per taxpayer for contributions to an HSA,” according to a section-by-section summary of the bill provided by Paul’s office.

Covering Pre-Existing Conditions

The bill would for two years prevent insurers from denying coverage to individuals with pre-existing conditions or charging them more.

Matt Hawes, Paul’s press secretary, says the two-year period would give individuals an opportunity to gain private insurance coverage regardless of their medical history.

“The open-enrollment period is designed to give the market time to adjust and for individuals to obtain coverage, potentially through some of the new pooling mechanisms,” Hawes said. “It would mean people with pre-existing conditions could not be denied for the two years. The insurer of these individuals would not be a government. It would be private insurance plans.”

After the two-year period, those transitioning from employer-sponsored health insurance to non-employer group health insurance could continue keeping their pre-existing conditions undisclosed, Hawes says.

“Individuals with pre-existing conditions who had coverage through the group market are provided protections under [the Health Insurance Portability and Accountability Act] against discrimination based on their pre-existing conditions when moving between plans on the group market,” Hawes said.

High-Risk Options

Unlike AHCA, the Obamacare Replacement Act would not allot federal tax dollars to subsidize state-sponsored high-risk pools of supposedly uninsurable individuals, Hawes says.

“Sen. Paul has concerns because [the pools are] a model that will always require a government to come in and subsidize an insurance pool that cannot exist on its own in the free market,” Hawes said.

The Obamacare Replacement Act would free each state to develop its own solutions for so-called uninsurable patients, Hawes says.

“Some states have in the past or may wish in the future to adopt another mechanism for dealing with their high-risk populations,” Hawes said. “We would potentially be open to fiscally conservative policies to assist states in a flexible way.”

Reconciliation Strategy

Paul’s plan would build on an Obamacare repeal bill Congress sent to Obama in January 2016, Hawes says.

“This plan is intended to be coupled with repeal of Obamacare through reconciliation,” Hawes said.

Bills passed through the House budget reconciliation process cannot be filibustered in the Senate.

Repealing Obamacare’s Medicaid expansion through reconciliation would be a step toward other Medicaid reforms, Hawes says.

“We are pushing for a repeal of the Medicaid expansion, as Republicans supported in the [December] 2015 reconciliation bill that repealed Obamacare. We would be open to policies such as a block grant, but [that] is not included in our bill.”

Michael McGrady ([email protected]) writes from Colorado Springs, Colorado.

Internet Info:

The Obamacare Replacement Act, Senate Bill 222, January 24, 2017:

Michael McGrady, “Paul Proposes Obamacare Replacement Act,” Health Care News, The Heartland Institute, February 24, 2017:

Michael T. Hamilton, “Rand Paul’s ‘Obamacare Replacement Act’ Deserves Trump’s Attention,” Consumer Power Report, The Heartland Institute, January 19, 2017.

Official Connections:

Rep. Justin Amash:

Rep. Thomas Massie:

Rep. Rand Paul:

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