The Obama Administration makes the claim that some 9.9 million Americans have signed up for ObamaCare. However, more than 8 million people are at risk of losing their coverage if the Supreme Court rules against the legality of the subsidies that make ObamaCare affordable for more than 80 percent of plan holders. Without these subsidies, the system would likely collapse.
Now, Republicans are stepping in with a plan to replace the un-Affordable Care Act and mitigate the damage for Americans who would lose their coverage. It will be only the first of what will be a number of plans that conservatives will put forward to replace ObamaCare. Senators Richard Burr of North Carolina and Orrin Hatch of Utah and Representative Fred Upton of Michigan introduced a proposal that rolls back many of the freebies and strips out the most pernicious aspects of the president’s signature healthcare law. It has similarities with a plan put forward last year by Burr, Hatch and former Senator Tom Coburn.
Under their plan, individuals would no longer be required to buy healthcare coverage nor would employers be required to offer it. That automatically scraps the shared pain payments (a.k.a. tax penalties) that between 2 and 4 percent of all taxpayers face for not carrying healthcare coverage.
This plan also would tighten the government’s belt in providing free or reduced coverage. Americans who secured coverage through the Medicaid expansion would be given tax credits instead to buy private plans and upper income families would no longer qualify for financial subsidies.
States would regain regulatory powers as well.
Not everything would be scrapped. Young adults would still be able to remain on their parents’ plans until they're 26. Some protections for those with pre-existing conditions would also be saved.
We don’t have any ideas of how much this would cost or how it would be paid for. We also don’t know what happens to those who have already ObamaCare plans. However, everyone has asked what conservatives would do about healthcare coverage and this is one answer -though not the only one.
The Washington Post reports on how this plan would transition into a post-ObamaCare system:
No more individual mandate
This plan repeals the individual mandate, a mechanism that ACA proponents said was necessary to help end insurer discrimination against people's pre-existing medical conditions…
A pre-existing condition ban, with a catch
This GOP plan also prevents insurers from charging sicker patients more, but with an important caveat. Under this plan, the lawmakers envision a one-time enrollment period to get adjusted to this new coverage scheme. After that, as long as you are continuously enrolled in coverage — and that includes switching insurance if you get a new job, for instance — insurers can't consider your medical history. But if you let your coverage lapse for a couple of months, insurers are allowed to take this into account.
The GOP plan also eliminates the ACA's employer mandate requiring businesses with 50 or more full-time employees to offer health insurance or pay a penalty.
Less generous subsidies
The ACA offers exchange subsidies to families of four earning up to 400 percent of the federal poverty level (FPL), or about $95,000. This GOP plan instead provides a refundable tax credit to purchase insurance to people earning up to 300 percent FPL…
The tax credits are also available to anyone under the poverty line, whereas the ACA expanded Medicaid eligibility to this group (in states that opted for the expansion)…
Other ACA features survive
Insurers would no longer be required to cover a set of 10 essential health benefits as they are under the ACA, but some ACA elements are kept in place. Young adults can stay on their parents' health plans until they turn 26, and the ban on lifetime coverage limits remains. Instead of allowing insurers to charge older customers no more than three times the amount what they charge younger customers for the same plan, that ratio is widened to 5:1, which means cheaper premiums for younger enrollees…
This is the first of many plans on how to replace ObamaCare.
With the possibility that ObamaCare's subsidies will not continue, it’s important that the conservatives be ready with alternatives. Human behavior tells us that when you give someone something and then take it away, they will be angry. It will be critical to minimize the fallout and human suffering that can come from losing a plan. Americans will adjust to losing some of their benefits and shouldering greater responsibilities better if they don’t feel that they are left out in the cold.
There’s no word on whether the White House is making plans for what it will do if the subsidies are ruled illegal. What we have seen is the President assembling ObamaCare enrollees to talk about the benefits they have received and suffering if they lose their plans. Opponents of ObamaCare have to be ready to counter this emotional pitch with good proposals for a genuinely improved health system.