GOP Alternative to Obamacare Gaining Support in House

RSC bill up to 108 cosponsors

November 21, 2013

A Republican alternative to the Affordable Care Act (ACA) is gaining steam in the House but could still use some work before it becomes a truly viable replacement, experts say.

The Republican Study Committee’s (RSC) "American Health Care Reform Act," introduced in September, currently has 108 cosponsors. The RSC plan repeals the ACA, commonly known as Obamacare, and replaces it with a system of tax deductions to help Americans purchase health insurance and federal support for state high-risk pools to cover those with pre-existing conditions.

It also cobbles together a number of GOP reform proposals from over the years to lower costs, including allowing people to buy health insurance products across state lines, permitting small businesses to pool together for better rates, capping non-economic damages in medical liability lawsuits, and making Medicare claims and payment data publicly available.

Rep. Steve Scalise (R., La.), RSC chairman, said it is important for Republicans to put forward their own "comprehensive" health care plan, especially as problems with the rollout of Obamacare persist. He hopes to reach 117 cosponsors of the bill to signal that it enjoys a majority of House Republicans’ support.

"Most people know we’re against the president’s health care law, but I think they want to see what we stand for," he said on Tuesday at a roundtable event with the Washington Free Beacon. "It’s smart for us to put all of that in the form of a comprehensive bill that’s very easy to read, less than 200 pages, and addresses these problems."

However, health care experts say that while the bill is a good start, significant improvements could bolster the proposal’s benefits and public approval.

Ramesh Ponnuru, visiting fellow at the American Enterprise Institute (AEI), said the plan’s tax deductions should be supplanted with tax credits to provide more benefits to low-income people. While tax deductions reduce peoples’ taxable income and help those with higher tax rates, tax credits reduce the total taxes people owe and are often refundable for those without a tax liability.

Tax credits should also only be available to people without employer-based health insurance to minimize disruption, he said. Any type of health care reform will cause some disruption, but the key is to make it gradual, he added.

"You don’t want a system where older and sicker employees generally find themselves without health coverage because all of the young people in their company have decided to bail on the company and get an individual plan," he said. "Once you’ve built a more robust individual market, then maybe some of the restrictions can be relaxed."

Thomas Miller, resident AEI fellow and health economist, said the importance of a gradual transition is a key distinction that Republicans often fail to make.

"When determining the scope and pace of any transition from employer-based coverage to a more individualized market for health insurance, reformers must keep in mind that many people will be relatively risk averse when approaching a re-ordering of their existing health-care arrangements," he wrote in a recent piece for National Affairs. "Americans are generally more concerned about making sure they have stable, secure health coverage than they are about whether that coverage allows them freedom and choice."

Indeed, experts say that is currently playing out with the growing public frustration over the cancellations of at least 3.5 million individual health care plans due to Obamacare regulations, a violation of President Barack Obama’s "if you like your plan, you can keep your plan" pledge.

Ponnuru said a robust Obamacare alternative could even cover more uninsured people while lowering costs and improving health care quality. A plan proposed by James Capretta, senior fellow at the Ethics and Public Policy Center, would actually cover 8 million more currently uninsured people than Obamacare does by 2015, according to projections in an April AEI report.

Obamacare by contrast is causing premiums to skyrocket in the law’s health insurance exchanges and the tax credits it provides may not be all that much help. Patients will also likely face reduced access to doctors and hospitals, experts say.

Scalise said the GOP will continue to push for a delay of the law’s individual mandate, which requires everyone to purchase Obamacare-compliant plans by the end of March 2014, as people repeatedly experience problems attempting to enroll in the online exchanges.

"Since this law doesn’t even work—since you can’t even buy the product that the law says you have to have in place by next year—we ought to agree that we should suspend the penalty that’s in the law for at least a year," he said.

Yet Ponnuru said the push to delay the mandate, while potentially necessary, should not supersede advocating for a Republican replacement.

"There has to be ‘a better way’ part of that message," he said.

Republicans are open to amendments to the plan as it goes through the committee process and "regular order" in preparation for a floor vote, Scalise said.

"We’ll take anybody’s good ideas," he said.

Their approach is a stark contrast to the president’s method for securing passage of Obamacare, which did not receive a single Republican vote, Scalise added.

"When the bill was going through in 2009, [Obama] went out on the campaign trail and multiple times on the campaign stump said, ‘if any Republicans have a good idea I’m open to it,’" Scalise said. "That day we sent a letter to the White House saying, ‘we’ve got good ideas; we’d like to meet with you.’"

"We never got a word back."