Republicans need to unite behind an alternative to Obamacare so they have a proposal ready if the U.S. Supreme Court rules that insurance subsidies in states that haven't established their own exchanges are invalid, Sen. Orrin Hatch told a gathering at the U.S. Chamber of Commerce on Tuesday.
The new chair of the powerful Senate Finance Committee reiterated that his preference would be to fully repeal the Patient Protection and Affordable Care Act. But Hatch (R-Utah) acknowledged that such action is unrealistic as long as President Barack Obama remains in office, wielding his veto pen.
“That doesn't mean we should do nothing,” Hatch said in the address, laying out his agenda for the Finance Committee. “While we may not yet be able to repeal Obamacare, we're going to continue to strike away at it, piece by piece if we have to.”
Hatch delivered his speech on the same day that Obama will lay out his priorities for the final two years of his administration during his annual State of the Union speech. Obama faces a Congress fully controlled by Republicans for the first time in his presidency.
Hatch cited repealing the medical device tax and eliminating the employer mandate as top priorities in chipping away at the ACA. He also referenced a healthcare package he introduced last year along with two other GOP senators as evidence of the seriousness of their intentions.
“Let's be clear: it's not enough for the committee or the entire Congress to simply send messages on Obamacare,” Hatch said. “We need to work toward positive solutions on our own.”
Most significantly, Hatch acknowledged the specter of the King v. Burwell lawsuit currently before the Supreme Court. A decision could invalidate subsidies in the 34 states that haven't established their own exchanges. That could result in 9.3 million low-and-middle-income individuals losing access to $28.8 billion in exchange subsidies in 2016, according to an analysis by researchers at the Urban Institute.
“We need to be prepared, because, should the Court invalidate subsidies to the (federal exchanges), we'll need to act to mitigate the additional damage Obamacare will inflict on the healthcare system,” Hatch said. “That's something we have to be working on.”
That sentiment is not universally shared by his fellow Republicans. Among staunch conservatives, any effort to fix the ACA is strictly verboten.
Hatch also indicated that two top priorities for healthcare interests—reauthorizing the Children's Health Insurance Program, which expires at the end of September, and repealing Medicare's sustainable growth rate formula for paying doctors—are “must pass” items. The latter has become a perennial fight as doctors face the prospect of 20%-plus decreases in payments if the widely loathed formula remains in place. The current patch expires at the end of March.
Hatch also addressed the long-term financial viability of Medicare. In recent years, there has been an unprecedented slow-down in spending on the healthcare program for seniors. But Medicare still faces long-term solvency issues as retirees make up an increasingly larger share of the populace. Hatch reiterated that he supports controversial changes to the program, including raising the eligibility age and allowing new beneficiaries to utilize subsidies to purchase private plans instead of enrolling in the traditional fee-for-service program.
“These are reasonable ideas that I put forward to begin the discussion on entitlement reform,” Hatch said.
Hatch also suggested that investigating what went wrong with some of the state-run exchanges established under the ACA will be a priority. More than $1 billion in federal funds was spent on exchanges that were never implemented, he said.
“We need to know what happened and whether that money will ever be paid back,” Hatch said.
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