House Republicans Release Plan to Repeal and Replace Obamacare

Published June 16, 2015

A group of House Republicans released a proposed health care plan that would replace Obamacare with patient-centered reforms and free-market solutions.

The 192-page American Health Care Reform Act (AHCRA) was written by Reps. Phil Roe (R-TN) and Austin Scott (R-GA). The authors describe it as an “aspirational model” of American health care and say it’s open for amendments.

Highlights include fully repealing President Barack Obama’s health care law, eliminating billions of dollars in taxes and thousands of pages of unworkable regulations and mandates that drive up health care costs, expanding federal funding for state high-risk pools, allowing health insurance plan purchases across state lines, reforming medical liability laws, and investing in research for the most common causes of death in the United States.

AHCRA covers four broad areas: It encourages competition in the health care market, improves health care access for vulnerable Americans, supports medical breakthroughs, and reforms medical liability laws, according to its authors.

Flexibility Praised

Josh Archambault, a senior fellow at the Foundation for Government Accountability, says AHCRA lays a solid foundation for greater access to insurance for more people than Obamacare provides, unlocks greater competition between health insurers, and helps lower the cost of insurance for most people.

“The bill is right to focus on health savings accounts as a tool to engage consumers in their health care,” Archambault said. “These tools need to be more flexible, and this bill would help significantly in that effort.”

Archambault expresses concerns about the provisions for high risk pools for those with preexisting conditions. He says these pools had mixed records before Obamacare was enacted in 2010 and can be very expensive. Archambault suggests the federal government should instead seek state-based solutions, such as the pre-Obamacare high-risk reinsurance systems in Idaho and Maine, which cover individuals with preexisting conditions but keep them in the market with everyone else to keep premium costs down.

Archambault is also concerned AHCRA contains some questionable provisions that may violate constitutional rights.

“There remain constitutional questions about doing medical malpractice reform at the federal level,” said Archambault. “This would be better handled at the state level.”

It is unlikely Obama would sign a law that repeals 100 percent of his signature law, but many ideas in the bill could end up in a replacement plan from Congress that gets signed by the president if the plaintiffs win the upcoming U.S. Supreme Court decision in King v. Burwell, Archambault says.

“The other political obstacle would be a move away from employer-based insurance to this standard deduction, but it is worth starting the conversation about such a change, as it has caused many of the dysfunctions we are dealing with today in healthcare,” said Archambault.

‘More Freedom and Control’

Twila Brase, president of the Citizens’ Council for Health Freedom, says the proposed bill would go a long way toward restoring health care freedom in America.

“[This] bill would not only expand choices for private health insurance, it would also give citizens more freedom and control over their health care dollars in health savings accounts and repeal a controversial comparative effectiveness council that could be used to ration care,” Brase said.

Brase says the tax incentives for individuals would move people toward privately purchasing and individually owning health insurance policies, which is a necessity for reducing health care costs and avoiding preexisting condition exclusions.

“Given our organization’s support for moving health care away from the federal level and to the states, we’re pleased that this bill would remove many of the federal controls now in place as a result of Obamacare and other restrictive federal laws and regulations,” Brase said.

Reintroducing Competition

The bill does not eliminate federal health insurance subsidies but makes them fairer, says Dr. Doug Perednia, author of Overhauling America’s Healthcare Machine.

“They are substituting subsidies in the form of tax deductions for actual payments to individuals or insurers on the part of the government,” said Perednia. “While the ultimate impact on federal deficits may be similar, this is a huge improvement because it finally places the payment of individual health care premiums on the same tax footing as payment of health care premiums by businesses.”

The favored treatment of premiums paid by businesses has been a huge source of inequity for people who are unemployed or are trying to start their own small businesses and do not have the financial means to purchase health insurance through their company, Peredina says.

“Obamacare advocates should be overjoyed at this, because it directly removes the insurance-based ‘job lock’ that prevents people from leaving their current jobs in order to follow their artistic, familial, or entrepreneurial tendencies,” Perednia said.

Praises Freedom to Choose

The bill’s plan to provide everyone with a standard deduction for health insurance—$7,500 per individual or $20,500 per family—would be a great improvement over the current system, says Devon Herrick, a senior fellow at the National Center for Policy Analysis.

“This is far better than relegating Americans to coverage they must obtain in malfunctioning exchanges with convoluted subsidies,” Herrick said. “Moreover, Americans would be free to choose the type of coverage that best meets their needs rather than being forced to enroll in a plan that’s not of their own choosing.”

Kenneth Artz ([email protected]) is managing editor of Health Care News.

Internet Info:

The American Health Care Reform Act, Introduced by Rep. Phil Roe, June 4, 2015: