GOP Releases its Version of the ACA

Long unhappy with the Obama administration’s Affordable Care Act (ACA) three Republicans (Sen. Orrin Hatch, R-Utah, Sen. Richard Burr, R-NC, and Rep. Fred Upton, R-Mich) released their version of a national health plan.

Dubbed the Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act, the measure would make coverage cheaper for young adults, and allow older individuals to pay up to 5 times more than the young. That would undercut a fundamental insurance rating strategy in the ACA, which is to assure that the care of more expensive older people is heavily underwritten by premiums from younger and healthier people.

States would be allowed to opt out of that provision.

Insurance companies would have the right to cancel coverage when consumers got behind in premiums, or misrepresented facts about themselves, though not simply because a policy holder became sick or injured. The plans would also have to spell out more information about costs of coverage and which doctors and other providers participate in networks.

Democrats pounced on the plan, saying it would leave Americans with less coverage and higher costs.

“It effectively raises taxes on the middle class, removes bedrock protections for consumers and chips away at key coverage benefits that Americans rely on," Sen. Ron Wyden of Oregon, said. "Republicans are trying to put politics first, put power back in the hands of insurance companies rather than patients," said Washington Sen. Patty Murray.

Republicans have vowed to repeal the ACA and President Barack Obama has said he would veto any such bill.

The new GOP insurance proposal strikes down the “individual mandate” provision of the ACA that requires people to get covered or pay a tax penalty. Anyone would be free to go without coverage. The employer mandate would also disappear, though the costs of providing employee coverage would continue to be tax-deductible.

Individuals’ subsidies for coverage would be handed out in the form of tax credits—rather than offsets to premium costs--but only for those making up to three times the Federal Poverty Level.

It would create a new health financing office at the US Treasury Department to oversee the tax credit plan.

State boundaries would no longer be barriers to purchasing coverage in other nearby jurisdictions, a proposal the GOP estimates “could dramatically reduce the number of uninsured Americans by as much as 12 million.”

The plan would “modernize Medicaid” by giving states more control over the program and allow enrollees to have the option of leaving Medicaid and getting a tax credit that could be used to purchase coverage.

A major initiative in the GOP plan would tackle tort reform, including new caps on non-economic damages and limits on attorneys’ fees. The plan calls for encouraging states to set up special health courts to adjudicate malpractice cases, with an eye to reducing huge judgment payouts for victims and the attorneys representing them.

The measure would also eliminate the medical device tax, a mechanism for funding the ACA’s expansion of Medicaid.

"The reforms outlined are intended to lower health care costs," and put the health care system "on a sustainable path, all while making sure that we do not add a single dollar to the federal deficit," the authors wrote.