Rand Paul criticizes GOP healthcare bill for being too similar to Obamacare
(CNN) — Republicans want to repeal Obamacare, but are they replacing it with Obamacare Lite?
So say Sen. Rand Paul and other conservatives, who are not happy with the plan to replace Obamacare that’s being crafted — some argue hidden — by GOP House leaders.
A 106-page draft version of the leadership bill was leaked last week, providing more details into how the House would dismantle major provisions of the Affordable Care Act and what would come in its stead. A closely held update has circulated among a select few in recent days. Conservatives and Democrats have demanded to see the new version but have had little success in ferreting it out.
In response, Paul has gone on a Twitter and media blitz, saying the bill does not accomplish Republicans’ mission of repealing Obamacare. That’s because many of the GOP replacement measures are too similar to the landmark health reform law.
“What we think is being hidden from conservatives is there’s a lot of ‘Obamacare Lite’ in their bill,” Paul said on CNN’s “New Day” Friday. “There’s a new entitlement program. … There is also a Cadillac tax or something similar to the Cadillac tax that was in Obamacare. And there’s also an individual mandate, believe it or not. Instead of paying the mandate to the government, they’re going to tell you you have to pay the mandate, by law, to an insurance company.”
Republican leadership, however, argues that it has been clear since last June, when House Speaker Paul Ryan unveiled his “A Better Way” blueprint. That plan was devised “through a bottom-up, Committee-led approach,” said AshLee Strong, Ryan’s press secretary.
“Our members ran on that plan throughout the election,” she said. “We’re following through on the promises we made to our constituents to provide Obamacare relief and a better way.”
Here are the three measures Paul doesn’t like:
Providing tax credits to buy individual coverage
Both Obamacare and the proposed GOP plan help people afford coverage by providing refundable tax credits that are paid in advance to insurers. Those buying policies on the individual market are eligible, but those covered through their jobs or the government are not.
There are significant differences, too. Obamacare’s subsidies are based on enrollees’ incomes and cost of coverage in their areas. The Republican tax credits vary with age, with older enrollees receiving more since their premiums are typically higher. Republicans are looking at excluding higher-income participants from eligibility since some lawmakers have complained that it would allow millionaires to receive government assistance.
While the subsidies can only be used for coverage bought on the Obamacare exchanges, the Republican credits can be used to purchase any plan on the individual market.
Limiting the tax break on employer plans
Like Obamacare, the draft GOP proposal seeks to cap the tax break for employer-sponsored coverage. Currently, those premiums are excluded from tax, which economists argue dampens wages and encourages unnecessary use of medical care.
The Republican plan would limit the exclusion to the cost of the 90th percentile plan nationwide — that is, the priciest 10% of plans would have to pay tax on the premiums. However, the way the draft bill is structured, the number of plans subject to tax would grow over time.
Obamacare also sought to curb the tax break on employer plans. Its vehicle of choice was the so-called Cadillac tax, which calls for imposing a 40% levy on the amount of employer premiums above $10,200 for individual and $27,500 for family policies. The idea is to have employers limit their benefits packages to a certain level, slowing the growth of health care spending and usage. The Cadillac tax was to have started in 2018, but it was delayed until 2020 amid pressure from companies and unions.
Penalizing the uninsured
One of the most reviled provisions of the Affordable Care Act is the individual mandate, which requires most Americans to have health insurance or pay a penalty. Those uninsured in 2017 will have to pay $695 or 2.5% of their income, whichever is higher.
The mandate’s purpose is to draw young and healthy Americans — who might not feel they need coverage — into the market. Their participation is crucial to balance out the higher costs of older and sicker enrollees, whom insurers are required to cover under Obamacare.
Since Republicans have said they want to protect those with pre-existing conditions, lawmakers must find a way to get these young and healthy consumers to buy policies. Their solution? Allowing insurers to charge more — 130% of a plan’s premium for a year — to those who let their insurance lapse. To Paul, this is simply letting insurers charge the penalty.