House Republicans Unveil Alternative to Obamacare

By Ella Kietlinska

The Republican Study Committee (RSC) unveiled on Oct. 22 a health care plan intended to replace the Affordable Care Act also known as Obamacare.

According to a study conducted by the Centers for Disease Control and Prevention (CDC), not more than 10% of the U.S. population did not have health insurance in 2018. This percentage was similar in 2017 and it decreased since 2010, according to the same source.

However, the recent study conducted by The Commonwealth Fund shows that more Americans than before are under-insured, and have to deal with growing out-of-pocket expenses like premiums and deductibles.

The Affordable Care Act (ACA) is funded by taxpayer’s money and savings from reduced payments to Medicare providers. It also includes some provisions meant to constrain healthcare costs, like accepting all applicants regardless of their pre-existing conditions and charging all insured the same rates.

On the other hand, these provisions can motivate healthy individuals to delay purchasing health insurance until they get sick. This, in turn, causes health insurance premiums to rise. As a result, individuals who do not have high-risk health conditions will pay higher premiums to cover for those who need high-cost treatments.

President Donald Trump promised when he was running for the office in 2016 to improve the country’s health care system, repeal Obamacare and replace it. The RSC Health Care plan offers an alternative to Obamacare.

The new plan “PROTECTS the vulnerable—especially those with pre-existing conditions; EMPOWERS individuals with greater control over their health care choices and dollars; and PERSONALIZES health care to meet individual needs and reduce premiums, deductibles, and the overall cost of health care,” states the introductory statement to the plan document signed by 10 Republican House representatives.

Under its provisions the authority to further customize and personalize the plan will be delegated to individual states.  For example, the states will be able to design cost-sharing, limits, percentage of medical costs covered, dependent coverage, to what extent certain health risks will impact premiums, etc., according to their citizens’ needs. This will replace the centralized approach adopted by Obamacare where these regulatory decisions were made on a federal level.

The plan also specifies that insurance carriers will not be able to increase rates, deny health insurance or its renewal if a person develops disease after enrollment.

People sign up for Affordable Care Act
Gerardina de la Mercedes (L) and Elena Blondin speak with insurance agents from Sunshine Life and Health Advisors, as they shop for insurance under the Affordable Care Act at a store setup in the Mall of Americas in Miami, Fla., on Nov. 1, 2017. (Joe Raedle/Getty Images)

It puts emphasis on incentivizing people to purchase and continue their health coverage before they get sick, thus maintaining the coverage continuity and reducing the burden on insurance companies to pay for costly treatment for those with pre-existing conditions.

The plan will also establish state-run Guaranteed Coverage Pools subsidized with federal funding which will cover medical costs for individuals requiring high-cost treatments. States will also receive federal funding to help low-income people cover their medical costs. States will have the flexibility to design their own regulations to manage the pool, according to their citizens’ needs, but states will not be allowed to use these funds to cover abortion costs.

Such a state-run system existed in Maine before implementing Obamacare, it was invisible to insured individuals and prevented insurance companies from making a profit when using the state pool. Maine’s pool model contributed to reducing health insurance premiums 12 to 15 percent according to the released RCS Health Care Plan document.

Delegating powers to states will help to keep the federal government small and will encourage states to come up with innovative and creative health care solutions.

To further resolve the handling of pre-existing conditions the plan puts emphasis on health insurance portability which will allow a person to carry their health insurance with them. Before Obamacare people could transition from one plan to another or from one insurance carrier to another but it was limited to health insurance plans offered by employers.

The portability offered by the RSC plan will allow people to transition from one employer to another or from employee-sponsored insurance to individual insurance without temporary exclusion of coverage due to pre-existing conditions as it was before enacting ACA. The RSC plan will keep the ban of temporary exclusion enacted by ACA but will also allow people to switch between employers, between individual plans, or between employee-sponsored and individual plans and prevent them from being refused health coverage based on pre-existing conditions.

RSC plan will also eliminate the ACA requirement that all employers with at least 50 full-time employees were mandated to offer health insurance coverage to their workers which causes some employers to limit their employee headcount or convert full-time employees to part-time employees.

The new RSC plan will allow using health savings accounts (HSA), which are tax-exempt, to pay health insurance premiums. Currently, only premiums of employer-sponsored insurance plans are tax-deductible. Premiums of  individual health policies are taxable.

The plan will also reform health savings accounts.

The released document is not a bill but a framework. The second part of the plan which will provide more details will be released at a later date.

House Speaker Nancy Pelosi commented on Twitter after Republicans released the plan document, “After 10 years of refusing to work with Democrats to #ProtectOurCare, the only plans offered by Republicans don’t cover & protect preexisting conditions. They say their plan is an alternative to the Affordable Care Act but it’s really just an alternative to health care, period.”