The WasteWatcher: The Staff Blog of Citizens Against Government Waste

An Obamacare Repeal/Replace First Draft

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On February 16, an "Obamacare Repeal and Replace Policy Brief and Resources" document was released that laid out the following points:  Obamacare has failed; it will only get worse; that repealing the law will provide relief combined with a stable transition to something new; and the Republicans in Congress have a better way to deliver healthcare in this country.

On February 24, a House of Representatives’ discussion draft legislation for repealing and replacing Obamacare was leaked to the press.  It may have been an intentional leak so that the House Ways and Means and Energy and Commerce Committees could get important feedback and reactions from their colleagues in Congress, healthcare policy wonks, and the press. 

The legislative draft somewhat mirrors the policy paper and definitely adopts many of the healthcare reform proposals Republicans have advocated for years such as:

 

  • Reducing the individual and employer mandate taxes for not purchasing health insurance to zero percent;
  • Phasing out Medicaid expansion by 2020, converting funding for the program to a per capita allotment, and putting the states in charge of the program;
  • Removing the Obamacare tax increases on health insurance premiums, pharmaceuticals, medical devices and the restrictions on purchasing over-the-counter drugs through health savings accounts (HSAs) and flexible savings accounts;
  • Making HSAs more flexible and accessible by increasing the amount that can be contributed to $6,550 for individuals and $13,100 for families;
  • Removing the taxes on medical devices, pharmaceuticals, and insurance premiums, which just get passed onto consumers;
  • Innovation grants to assist states in funding programs they think would be helpful to their citizens, such as risk pools for people with pre-existing conditions, to lower costs for premiums and out-of-pocket expenses; and
  • Advanceable and refundable healthcare tax credits to help Americans that do not get their health insurance from their employer, particularly those with low incomes.

 

The draft legislation certainly has started conversations among members of Congress and the public.  Currently, the biggest issue are the tax credits and there is a wide variety of opinion how these should be handled.  For example, Inside Health Policy reported on February 27 that the conservative Republican Study Committee (RSC) Chairman Mark Walker (R-NC) is not happy with refundable tax credits, stating they create a new entitlement program.  But while he could get on board with them, he wants to see the cost.

Representative Mark Meadows (R-NC), who is the Freedom Caucus Chair, also does not like the refundable tax credits and prefers a deduction instead.  Both the RSC and the Freedom Caucus include the most conservative members in the House, numbering some 212, and are enough to scuttle any Republican repeal and replace plan.

Members are also concerned that Medicaid expansion does not end quickly enough and that some future Congress could keep the expansion alive and the enourmous amount of federal funds flowing.

Apparently, this draft legislation may already be off the table.  The Energy and Commerce Health Subcommittee Chairman Michael Burgess (R-Texas) said it is already “ancient history.”

However, it does at least provide a starting point for discussion and includes many provisions that Citizens Against Government Waste has supported in the past.  And what must be kept in mind is that President Trump and the Republicans have said they will protect those that did obtain health insurance via Obamacare.

Here is what is clear.  The Republicans and President Trump, who said stated it in his speech last night before Congress, are determined to repeal and replace Obamacare.

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