Congressional Republican leaders are hoping their new Obamacare repeal-and-replace proposal (PDF) will convince Chief Justice John Roberts and his conservative colleagues on the U.S. Supreme Court that it's safe to strike down the premium subsidies at the heart of the healthcare reform law.
If Republicans don't clearly signal that they stand ready to quickly offer financial assistance to millions of Americans to keep them from losing their insurance, the justices may blanch at throwing the health insurance system into chaos, conservative analysts warn.
Some conservatives argue that the new plan proposed by Sen. Richard Burr (R-N.C.), Sen. Orrin Hatch (R-Utah) and Rep. Fred Upton (R-Mich.) will cover more people than the Affordable Care Act for less money.
That's impossible to prove or disprove now because the proposal can't be scored by the Congressional Budget Office until it's put into legislative form, and that's not likely to happen any time soon.
But centrist and liberal analysts doubt that the GOP proposal would offer adequate subsidies and regulations to maintain anything close to the coverage expansion achieved so far by the ACA.
Beyond that, even Burr, one of the authors, doubts that his plan can win support any time soon from a majority of congressional Republicans and be enacted before the 2016 presidential election.
That means nearly 5 million people in up to 37 states likely would become uninsured if the Supreme Court invalidates their subsidies come June, with no solution in sight. The increase in the uninsured could well be larger if the end of subsidies triggers a predicted “death spiral” in the individual insurance markets in those states. And pressure probably would build to throw out the entire law (PDF), which would threaten coverage for nearly 20 million Americans covered by the law's public and private insurance expansion.
There are numerous policy question marks about the GOP proposal offered by the Republican chairs of three key congressional committees. Those issues include the adequacy of the proposed tax credits to make coverage affordable and the method of ensuring that people with pre-existing conditions could obtain coverage.
“You'd be going to a pre-ACA world where there could be big gaps in coverage, no out-of-pocket caps, no essential benefits, and people in poorer health locked out of coverage because of pre-existing conditions,” said Edwin Park, vice president for health policy at the liberal Center on Budget and Policy Priorities.
Still, even as these GOP leaders seek to replace the ACA, it's notable that they adopted an Obamacare Lite model, suggesting that Obama and the Democrats have won the reform policy debate, as Paul Waldman argued in the Washington Post.
As he wrote, the Republicans are offering premium tax credits—but just not as generous as the ACA's. They are promising protection against insurers' denial of coverage based on pre-existing medical conditions—but not nearly as strong as the ACA's. They would extend Medicaid to low-income Americans—but only to 100% of the federal poverty level, not 138%. They would require health plans to offer dependent coverage up to age 26—unless state regulators say otherwise. They would tax high-value health plans to help pay for the coverage expansion—but those taxes would hit fewer plans at a lower rate and raise much less revenue to pay for the coverage expansion.
The Republicans are “accepting the government's role in both regulating insurance and in helping people pay for it; they just want to make the benefits not so attractive,” Waldman wrote.
What has been little discussed so far is that entirely repealing the ACA as the Republicans propose also would toss out many other programs and structures—including the CMS Innovation Center and its initiatives—that healthcare industry stakeholders have built into their business plans. There is no mention of the CMS Innovation Center or any of these other programs in the executive summary issued by the GOP authors.
Such programs that would be abolished include:
- Insurance exchanges allowing consumers to shop for and compare health plans
- Medicare and Medicaid accountable care organization demonstrations
- Medicare penalties tied to excessive hospital readmissions and rates of hospital-acquired conditions
- Public reporting of payments by medical manufacturers to physicians and teaching hospitals
- Funding for Medicare bundled-payment demonstrations and other payment and delivery innovations
- Payments to private insurers to mitigate the risk of enrolling a sicker population of members
- Comparative-effectiveness research initiatives such as the Patient-Centered Outcomes Research Institute
If Chief Justice Roberts and his colleagues see the GOP proposal as comfort that they can cut out Obamacare's heart and that Congress will rapidly put something else in its place to avoid major disruption, they need to take a closer look.
Follow Harris Meyer on Twitter: @MHHmeyer
