As we move into the middle of February, the Republican led Congress shows no signs of slowing its legislative assault against Obamacare. But rather than a simple bit by bit attack on the healthcare law, Republicans brought out the big guns: an attempted full scale dismantling.
On Tuesday, February 3rd, the House of Representatives voted to repeal the Affordable Care Act. The bill passed on a 239-186 vote. Republicans were not unanimous in their support for repeal. Representatives Robert Dold, John Katko, and Bruce Poliquin all crossed party lines by casting “nay” votes.
As expected, President Obama vowed to veto the bill if it ever reached his desk. He also questioned the logic of the House tackling Obamacare now that it’s law. “Why is it that this would be at the top of their agenda?” he said. “It was maybe plausible to be against the Affordable Care Act before it was implemented. But now it has been implemented and it is working.”
This may be simply a symbolic gesture, designed to prove to Congressional Democrats and constituents that Republicans are serious about repealing Obamacare. After all, everyone is aware of the showstopping power of Obama’s veto pen. But it does demonstrate the Republicans’ willingness to pursue every possible avenue at their disposal in their assault on Obamacare. This is just one of certainly many more anti-ACA bills we will see in the coming year.
However, some speculate that the Republicans’ efforts would be disastrous if successful. According to Timothy Jost, a healthcare law expert at the Washington and Lee University School of Law, “Talk of repealing the Affordable Care Act is like talk of repealing the interstate highway system. I mean in theory you could do it. Nobody would want to live with it.”
Experts speculate that the repeal of Obamacare would significantly increase the number of uninsured. If current subsidies become unavailable to low income Americans, patients would fall off the rolls in droves.
But the end of Obamacare wouldn’t just affect the insured. It would also affect insurers. If the individual mandate were to suddenly end, many healthy people would stop paying for insurance. This would leave only older and sicker people locked into healthcare plans. And this would hurt the bottom line of insurers who count on healthy people to subsidize the cost of covering sick people.
Critics of the repeal effort argued that it isn’t feasible to repeal Obamacare, because Republicans didn’t offer an alternative. Even one of the Republicans who voted against the repeal mentioned this problem as part of his rationale for his vote. “Casting yet another symbolic vote for full repeal of the law, without any replacement legislation, simply distracts us from the work that must be done to drive costs down, restore access to care and make healthcare work for everyone,” he said.
Three Republican Congressmen, seeking to meet that challenge, have introduced their own version of American healthcare.
The Republican Healthcare Alternative
Senator Orrin Hatch, Representative Fred Upton, and Senator Richard M. Burr introduced a summary of their proposed healthcare reforms. You can read the entire document, called The Patient Choice, Affordability, Responsibility, and Empowerment Act.
One of the proposals of the plan is especially surprising, especially since it’s drafted by normally tax-averse Republicans. It would require workers to pay federal income tax on employer-provided health benefits that exceed a certain threshold. Initially, individuals would be taxed on health benefits that exceed $12,000 in value, and families would be taxed on benefits that exceed $30,000 in value. These thresholds would gradually increase.
One of the biggest ways that the Republican plan deviates from Obamacare is in the absence of the individual and employer mandates. Nobody will be compelled to get covered. The document makes this distinction clear: “If consumers do not want to buy coverage, they don’t have to,” it says.
Like Obamacare, the plan will offer subsidies for low income Americans who buy health insurance. While Obamacare currently offers subsidies for people with incomes up to four times the poverty level, the Republican plan offers subsidies for people with incomes up to three times the poverty level.
The act would also implement medical malpractice reforms, with the goal of making lawsuits smaller and less frequent.
“The reforms outlined above are intended to lower healthcare costs, empower patients in their insurance choices and health care decisions, and put our health care system on a sustainable path, all while making sure that we do not add a single dollar to the federal deficit,” the document says in its concluding paragraph.
The Battle Continues
The introduction of an alternative plan puts a new twist in the story of the battle over Obamacare. Republicans are working to counter the accusation that they simply aren’t able to offer a realistic alternative to what’s already in place. This signals that the Republicans’ tactics are maturing, and they’re thinking about real world ways to transition America away from the ACA.
Will it work? It’s still too early to say. Obviously, the proposal of an alternative plan that still retains some elements of Obamacare shows that Republicans are willing to compromise just to overturn the ACA. It’s possible that this plan is merely designed to lay some some groundwork for a possible Republican victory in the 2016 presidential election. If the Republicans have control of Congress and the presidency, and they have a polished alternative to the ACA drafted, repealing Obamacare actually seems viable — and likely to happen.
As always, you should be honest, but assuring with your clients if these issues are ever brought up. If they have questions about how the health insurance landscape is changing, tell them it’s within the realm of possibility that some subsidies could no longer exist a few years from now. But if the law changes in the future, you’ll be there to work with them to ensure they still have quality, affordable coverage. The best way to ensure that your current clients continue to be your clients, regardless of how Washington changes the healthcare system, is to be their supporter and advisor through all this confusion and uncertainty.