Editing Obamacare: The GOP Tries a Different Tack

The Fiscal Times

President Obama lashed out at Republicans in his State of the Union address Tuesday night for continuing to wage war on his health care law instead of offering solutions to fix it. 

"Let’s not have another forty-something votes to repeal a law that’s already helping millions of Americans,” the president said. “The first forty were plenty.  We got it.” 

That statement may be one of the rare areas where the GOP is actually starting to agree with the president. Earlier this week, three Senate Republicans unveiled the GOP’s first-ever real proposal to replace Obamacare

Related: 11 GOP Attorneys General Say Obamacare Fix is Illegal

The plan, offered by Sens. Tom Coburn (R-OK) Richard Burr (R-NC) and Orrin Hatch, (R-UT), resembles a scaled back version of the president’s health care law. It gets rid of the insurance mandate—arguably the most unpopular Obamacare provision among Republicans.  

“Our health care system wasn’t working well before Obamacare and it is worse after Obamacare,” Coburn said in a statement. “Americans deserve a real alternative, and a way out.”

The Republican proposal weakens a popular piece of the law that prohibits insurers from discriminating against people with pre-existing conditions. Under the plan, insurers would be required to offer policies to anyone who has proof of “continuous coverage.” However, those who have pre-existing conditions and have failed to maintain continuous coverage, could still be denied coverage — a contentious piece of the legislation that has received tremendous backlash from liberal groups. 

“Making it legal again for big insurance to discriminate against and deny coverage to 89 million Americans with pre-existing conditions is not an alternative — it’s a joke,” Americans United for Change said in a statement. “A sick one at that.” 

Related: Obamacare Mess Defines GOP 2014 Campaign Strategy

The Republican proposal leaves some provisions of Obamacare intact. For example, insurers would still be prohibited from imposing lifetime limits on the benefits a consumer receives and it would leave transparency requirements from hospitals and insurers in place.

It also continues the Obamacare provision allowing young Americans to stay on their parents’ insurance coverage until they are the age of 26 — though it gives states the ultimate decision of whether to continue the benefit.

Like Obamacare, the GOP plan offers tax credits and subsidies to make health care more affordable for families, but the benefits are significantly scaled back. Families earning up to $70,650 per year would qualify for subsidies, compared to families earning up to $94,200 under the ACA. And employees working for large companies would be exempt from receiving subsidies, regardless of income, or whether their company offered insurance.

The biggest difference between the GOP’s plan and the law, according to Obamacare advocates, is cost control. That’s because right now, employer-sponsored health insurance is not taxed. But under the Republican proposal employees would pay an income tax on at least 35 percent of what their company pays for their plan.

This would create an incentive for consumers to select more affordable health coverage plans with more deductibles and co-payments, which would encourage them to shop around for cheaper treatments and forgo unnecessary ones.

Related: Why the GOP Shouldn’t Count on an Obamacare Collapse

“If you are one of the 150 million Americans who get their health insurance through an employer-sponsored plan, get ready for a big tax increase. For a family in the 28 percent tax bracket (earning around $150,000 per year). It would add up to about $1,470 per year,” Ezekiel Emanuel, former White House health policy adviser for President Obama and brother of former White House chief of staff and current Mayor of Chicago Rahm Emanuel, wrote in The New York Times. “Now that Americans have the chance to examine the alternative, it might help them see the advantages of Obamacare.”

Of course, as the authors of the proposal have acknowledged, the Democrat-controlled Senate would never pass such a bill and it would never receive signage from the president.

For now, the plan essentially signals that Republicans are finally done with their strictly symbolic votes to repeal Obamacare—and instead may be ready to start offering solutions to whatever problems they have with the law.

The bill is a “stepping stone for a legislative vehicle,” aides told The Hill, adding that it will gain momentum as interest in Obamacare alternatives grow.

At the very least, Republicans will now be able to tell voters who are unhappy with the president’s health care law, that they have offered solutions ahead of the 2014 mid-term elections.

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