What will the GOP use to replace Obamacare? That has become the core question on both sides of the aisle as President Donald Trump begins his term. So far, nothing's definitive, but one thing’s for certain, says Americans for Tax Reform’s Grover Norquist: The states will play a larger role.
Kentucky Republican Sen. Rand Paul announced Wednesday he has drafted an Obamacare replacement plan with the intention of pushing the GOP to have something ready the minute the Affordable Care Act is repealed. This is just one salvo of many in an attempt to address that core question.
Trump has stopped all White House outreach and advertising of Obamacare, even as congressional Republicans reportedly met with him and Vice President Mike Pence Thursday at the GOP retreat in Philadelphia to discuss various replacement proposals. Trump’s stated desire to expand coverage, continue to cover pre-existing conditions, repeal any mandates and lower the cost of insurance looks to some conservatives like the “original sin” of Obamacare, for example, universal coverage through regulations and subsidies that serve as justification for higher costs.
However, the GOP must do something. Repealing and replacing Obama’s signature legislation has a demand of the GOPs constituencies almost since its passage. And Paul’s proposal — which promotes the use of Health Savings Accounts and a tax credit — is not the only legislation offered up for consideration. Republican Sens. Bill Cassidy of Louisiana, a conservative, and Susan Collins of Maine, a moderate, have also proposed the Cassidy-Collins plan, which will give states the choice of keeping Obamacare, creating their own insurance expansion or opting out of federal health care assistance. This, again, looks an awful lot like Obamacare, but with the states offering a choice.
“If we do not start putting specific legislation on the table that can be debated, refined, amended and enacted, then we will fail the American people,” Collins told NPR Thursday.
But is it the role of the federal government alone to assume the responsibility of any replacement's failure or success? What is becoming increasingly clear is that the states are going to have a much more defined and expansive role in governing health-care insurance once Obamacare is repealed, forcing them to take some of that responsibility.
Norquist puts it simply: “It’s going to put pressure on the states to become competent.”
On Tuesday, ATR published a revealing list of the taxes levied on middle class families by Obamacare. ATR published the list as a response to Missouri Democratic Sen. Claire McCaskill’s claim Tuesday that repealing Obamacare’s 20 new or higher taxes would benefit “the rich.” McCaskill made the allegation during Health and Human Services Secretary-designate Tom Price’s confirmation hearings.
The ATR piece states that the law “imposed roughly $1 trillion in higher taxes over 10 years that directly and indirectly hit middle class families and businesses.”
The law imposes a tax for failing to buy government-mandated insurance, imposes taxes on the millions of Americans using Health Savings Accounts and Flexible Spending Accounts, imposes an income tax hike on Americans facing high medical bills, imposes a new tax on health insurance, a tax on medical devices, a tax on employer provided care, and a tax on innovative medicines and other treatments.
And in response, the GOP leadership has decided to act on repealing and replacing the law, much of which can happen through the budget reconciliation process, which requires a simple majority vote in the Senate.
Norquist notes, however, that the reconciliation process is limited to those parts of the legislation that are related to expenditures and does not cover the Medicaid expansion that Obamacare offered to the states, nor those with pre-existing conditions. Those, he says, are the two big challenges the GOP faces when drafting anything to replace Obamacare.
He says under a Medicaid block grant plan, which could be used to address the first challenge, where the federal government gives a fixed amount to a state for the purpose of providing Medicaid, everyone who went on Medicaid will continue as they had, just under rules designed in their state.
“I believe from talking to [GOP leaders], the big picture is that you block-grant Medicaid,” he told TheBlaze. “Somewhere between half to two-thirds of Obamacare users just got onto Medicaid. You fix those people’s challenge with a block grant. If you do that, you can save one to two trillion over a decade.”
As to the other challenge, pre-existing conditions, Norquist gives options. Many on the left worry those with pre-existing health problems will face losing their insurance or will have to pay significantly more for coverage. Norquist says one option is the return of high-risk pools.
According to HealthInsurance.org, a return to risk pools was actually proposed by Republicans back in June 2016.
Their plan calls for $25 billion in federal funding for high-risk pools. States would partner with the federal government to run the pools; premiums would be capped, and enrollment waiting lists would not be allowed. (Pre-ACA, some states had high-risk pools that were no longer accepting applicants, due to enrollment caps.)
Norquist notes that much of what the GOP is considering as part of a potential piecemeal replacement of Obamacare was proposed as part of Speaker of the House Paul Ryan’s “Path to Prosperity” and has been available for public consumption for some time.
He also mentions the possibility of expanding access to Health Savings Accounts and “mini-subsidies” for those that qualify as other options that should be out there for consideration.
Norquist says he is personally optimistic about an HHS led by Tom Price and believes he that Price will live up to Trump’s ultimate vision of allowing consumers to buy health insurance across state lines, something many Republicans believe would create more competition in the insurance market and therefore reduce costs.
As for repealing and replacing Obamacare, he says the goal is to “take apart as much as you can.”
“They’re going to have to figure out new laws or how to get around existing ones by not enforcing things,” he said, with a nod to Trump’s recent executive order reinstating the “Mexico City policy," essentially defunding international Planned Parenthood.
But whatever replacement the GOP ultimately decides is appropriate for Obamacare, Norquist says the states are going to need to be ready to step up and play a larger role.