Latest Republican Proposal: Let States That Like Obamacare Keep It

By | January 18, 2017

Republican Senator Bill Cassidy is making an offer to Democrats he hopes they won’t refuse: If their states like Obamacare, they can keep it.

A doctor who worked for decades in charity hospitals and clinics before joining Congress, Cassidy plans to introduce soon an updated version of his healthcare plan aimed at giving states flexibility to keep Obamacare, nix it entirely or transition to a new system of health savings accounts and automatic health plan enrollment.

“You can go to the reddest state and say we have the option to root and branch it, and you can go to the bluest state and say we have the option to keep what we like,” the Louisiana Republican said. Under his plan, “Republicans say, ‘You have the option to keep your plan,’ and we mean it,” he added.

Republicans will need Democratic support to pass a full replacement for Obamacare, and Cassidy’s approach may be the most likely to appeal to Democrats of the ones offered by the GOP so far.

“We should have a plan that isn’t Republican, that isn’t Democrat,” he said. “Our plan gives each state the authority to run the health plan in their state as is suitable to their peculiar situation, and that’s hard to argue with unless you want more power in Washington, D.C.”

U.S. Sen Bill Cassidy
R., Louisiana

“A reasonable person can say, I live in California, I love Obamacare, this plan allows me to keep it. And I live in Arizona, my premiums just went up 100 percent and I have a chance to do something different.”

That’s a feature that other proposed replacement plans floating around — like that of Representative Tom Price of Georgia, nominated to be secretary of Health and Human Services — don’t have.

Defining ‘Repeal’

Notably, Cassidy has a narrow view of what would count as “repeal” of the 2010 Affordable Care Act. He wouldn’t touch the changes it made to Medicare, nor would he eliminate the Medicaid expansion or the law’s taxes, at least not right away. But the federal mandates, which Cassidy said are what his constituents popularly think of as Obamacare, would go away.

“They are concerned about the penalties, the mandates, the requirement to buy things they don’t need and therefore the escalating costs. If we address that, we’ve repealed Obamacare,” Cassidy said in an interview. “They just hate the federal government telling them how to live their lives.”

There are roadblocks ahead, especially because he wants his fellow Republicans to delay repealing the law’s assorted tax hikes until they can be replaced as part of a broader tax overhaul later this year.

Cassidy had the backing of Republican leaders Mitch McConnell and John Cornyn for an earlier bill in 2015, when they thought the Supreme Court was set to invalidate subsidies in many states in the King v. Burwell case; the court upheld those subsidies. Now, leaders haven’t indicated which plan they will back, and Cassidy is still revising his bill.

Cassidy said he doesn’t see how Republicans can repeal all of the taxes now and have a robust alternative later that could insure more people than the Affordable Care Act without adding to the deficit — because Republicans wouldn’t vote to raise taxes later.

“Terrible problem! You can’t do it!” he said.

CBO Trouble

The Congressional Budget Office, meanwhile, weighed in Tuesday with an ugly new assessment of last year’s GOP repeal bill, which Obama vetoed. The CBO estimated 18 million people would have lost coverage in the first year of implementation and premiums would have risen an extra 20 to 25 percent, provided that consumer protections like a ban on refusing coverage to people with pre-existing conditions stayed on the books.

After a decade, the CBO predicted virtually the entire non-group market would have failed, with insurers abandoning it, premiums doubling and 32 million more people without coverage than if Obamacare had continued.

Republicans were quick to pronounce the score “meaningless” because they will have a replacement, but the stark numbers underscore that they have yet to agree on one.

Cassidy has worked on his bill with fellow Republicans, including Senator Susan Collins of Maine and House Rules Chairman Pete Sessions of Texas, among others.

He said he doesn’t expect Democratic support up front — he thinks the first bill aimed at setting an expiration date for Obamacare will be too partisan for Democrats to consider negotiating. In addition, Democrats still hope the repeal effort will falter.

‘Have Our Act Together’

“We have to show that we have our act together before they’re going to risk it, I get that,” Cassidy said. He has spoken to several Democrats, and hopes they’ll consider working with the GOP on a follow-on “replace” bill rather than get left out of the process entirely.

A key feature of Cassidy’s plan is a provision allowing states to automatically enroll eligible people in health plans unless they opt out. Cassidy said this could get more people insured than Obamacare’s approach of taxing people who fail to get insurance, citing studies showing people are far more likely to participate in benefits like 401(k) retirement savings plans under such an opt-out model.

His plan aims to solve the dilemma Republicans face over nixing the Medicaid expansion. The party faces a split between senators from states that are getting billions of federal dollars under the expansion and senators whose states rejected it. Republicans can’t do anything without the votes of both groups of senators, given their slim 52-48 majority.

Cassidy would let the money keep flowing, but with far fewer strings attached. States that didn’t expand Medicaid would get fresh funding based on how many people they insured. The new spending in those red states wouldn’t count as increasing the deficit because the CBO assumes those states will eventually expand Medicaid and take the money, Cassidy said.

He said he envisions a multi-year transition to his plan — a new law this year, a year for states to decide which option to choose, and implementation in 2019.

Cassidy, like Price, also includes in his plan refundable tax credits that he envisions going into health savings accounts.

Price’s plan could have a leg up initially given his key role in the administration. But Democrats, unions and their allies are likely to to attack it heartily, including his intention to limit the tax deductibility of employer-provided health insurance, where most Americans get their coverage. To help pay for a new system of tax credits, he would limit employer-provided tax-deductible health care to $8,000 a person and $20,000 for a family plan.

Public Outcry

Already there are signs of a public outcry from constituents worried they will lose their insurance, and Cassidy said people should weigh in with Congress if they want to keep parts of Obamacare they like.

“If they want to continue to have pre-existing conditions covered, they need to let their representative know,” he said.

“If they want to continue to have some help to purchase coverage for those who are lower income or those who are otherwise struggling, they need to let us know,” he added. “I think they do, when I speak to them, but I’d like to think that we’re truly functioning as representatives, not as like Obamacare turned out to be: ‘Whether you like it or not, suck it up, you’re getting it.'”

Topics Politics

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