House Republicans Unveil Replacement for the Affordable Care Act

Federal Health Care Reform, Transparency, Quality and Cost Containment

This week, in response to frequent criticism that Republicans have no plan for replacing the Affordable Care Act (ACA) should it be repealed, a group of House Republicans finally introduced their alternative, the American Health Care Reform Act.  The comprehensive bill includes a number of proposals Republicans long have backed to expand access and hold down the cost of health care, including:

• Fully repealing the ACA;
• Allowing Americans to purchase health insurance across state lines and enabling small businesses to pool together to purchase insurance;
• Providing a tax deduction of $7,500 for individuals against their income and payroll taxes to purchase approved coverage, regardless of the cost of the insurance—families could deduct $20,000;
• Eliminating the tax exclusion for employer provided health coverage;
• Expanding access to Health Savings Accounts (HSAs) and increasing the amount of pre-tax dollars individuals can deposit into them;
• Reauthorizing state high risk pools and providing $25 billion over ten years for operational expenses;
• Increasing transparency by making Medicare claims and payment data publically available; and
• Reforming medical malpractice laws to limit trial lawyer fees and non-economic damages.

No overall cost estimates for the bill were available and the legislation contains no provision to ensure insurance coverage for millions of lower-income Americans who are scheduled under current law to be enrolled in Medicaid.  Nor are there replacements for several ACA requirements, including the mandate that health plans retain children up to the age of 26 on their parents’ coverage and another barring lifetime limits on coverage.  Although the bill would likely pass the House should it come up for a vote, it is unlikely to be considered in the Senate until after the 2014 election at the earliest.