Congressional Republican leaders are hoping to rally their colleagues behind a new repeal-and-replace package for Obamacare.
The impetus is the King v. Burwell case pending before the U.S. Supreme Court that could strike down premium subsidies for millions of Americans in states that haven't established their own insurance exchanges. Those low- and middle-income recipients are disproportionately residents of GOP-led states, causing a potential political headache for Republicans if large numbers of their constituents lose access to financial assistance.
A broad proposal released last week by Sen. Orrin Hatch of Utah, chairman of the Finance Committee; Sen. Richard Burr of North Carolina; and Rep. Fred Upton of Michigan, chairman of the Energy and Commerce Committee, is largely a retread of a plan put forth last year by Burr, Hatch and now-retired Sen. Tom Coburn of Oklahoma.
Republican leaders and conservative pundits have said they needed to offer a credible plan to convince the Supreme Court justices that they don't have to worry about creating chaos in the healthcare marketplace if they strike down the subsidies.
The new proposal, dubbed the Patient Choice, Affordability, Responsibility and Empowerment (CARE) Act, would offer means-tested premium tax credits to people earning up to 300% of the federal poverty level, rather than 400% under the Affordable Care Act. The proposal also would eliminate the expansion of Medicaid to individuals with incomes up to 138% of the federal poverty level. It would convert Medicaid into a state block-grant program and cap federal spending. And it would abolish the Obamacare insurance exchanges.
In addition, the GOP plan would scrap the individual and employer coverage mandates and offer a different way of barring discrimination against individuals with pre-existing conditions. Insurers would be required to accept any customers who have been continuously covered, with an initial open-enrollment window in which health plans would have to take all comers.
The Hatch-Burr-Upton plan also would toss out the essential benefits requirements of the ACA, which allow subsidies to be applied only to plans designed to cover at least 60% of medical costs. It thus would allow more limited-benefit plans, subject only to state regulation. The GOP plan also would increase the premium cost-differential allowed for older customers from 3-to-1 under the ACA up to 5-to-1.