There are some critical pieces of information missing from the early analyses of the House Republican’s Obamacare replacement plan, released last night. Namely, we still don’t know how much it would cost (it doesn’t have an official estimate from the Congressional Budget Office) and what affect it will have on coverage (though it would likely cover fewer people). Needless to say, both matter. Here’s some of what we do know:
- Much of Obamacare’s framework would remain in place, including the ban on discriminating against people with preexisting conditions and the option for young people up to 26 years old to stay on their parents’ insurance.
- But the bill tosses the individual mandate to purchase insurance and the subsidies that accompanied it, instead offering tax incentives to compel people to buy coverage on the open market. People who drop coverage for longer than two months would face what is effectively a stiff fine, in the form of a year-long, 30% premium surcharge, to buy back in.
- It would temporarily preserve Obamacare’s Medicaid expansion — which accounted for roughly half of the new coverage the law achieved — allowing new enrollees until 2020. States that haven’t yet opted to participate in the expansion could do so until then. It would also impose a new cap on payouts for patients in the program.
- The highest-earning households would pay less, and insurance company executives could see a pay bump. The bill would repeal a pair of taxes that Obamacare imposes on the wages and investments of the wealthiest Americans to help pay for broader coverage. And it scraps a $500,000 limit on the amount of C-suite salaries that insurance companies can claim as a tax-deductible business expense.
The proposal is already beset by challenges from within GOP ranks. From the party’s right flank, members of the ultraconservative House Freedom Caucus, joined by Kentucky Sen. Rand Paul, are deriding it as Obamacare Lite. Meanwhile, four senators from the party’s more moderate wing say they’ll object to any plan that “does not include stability for Medicaid expansion populations.”
Democrats for their part are pledging uniform opposition. And Rep. Jason Chaffetz (R-Utah) handed them a potentially killer soundbite this morning by indicating that the Republican proposal will take money out of people’s pockets: “Americans have choices, and they’ve got to make a choice,” he said in a CNN interview. “So rather than getting that new iPhone that they just love and want to go spend hundreds of dollars on that, maybe they should invest in their own health care.” That wouldn’t appear to square with President Trump’s promise that “everybody’s going to be taken care of much better than they’re taken care of now” under a plan that provides “insurance for everybody” and “healthcare that is far less expensive and far better.”
Republican lawmakers have little time to sift through the nuts and bolts of the plan — the House Ways and Means Committee is set to start amending it tomorrow. Stoking a sense of now-or-never urgency may be the best bet for the White House and GOP leaders to overcome Republican misgivings.
Tory Newmyer
@torynewmyer
tory_newmyer@fortune.com
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