Republicans in Congress are moving forward to fulfilling the promise of repealing and replacing Obamacare. The work performed by Senate Republicans revealed this week represents another step in the right direction.
Repeal and replacement of Obamacare cannot come too soon. Millions of Americans have had their health insurance policies cancelled, choices reduced, and taxes raised by the law.
In campaigning for its passage, President Barack Obama promised Americans that if they like their plan, or their doctor, they can keep both. This was flatly untrue. I know, because I’m one of the more than 1 million Californians whose health insurance was made illegal under the law. Also like many Californians, the options I had for a new plan were all dramatically more expensive than my old plan.
This is not what we were promised.
Obamacare was supposed to provide more options for people to buy insurance, but for millions of Americans the opposite has proven true. In Arizona, for example, state residents are down to just one choice on the Obamacare exchange.
One choice is no choice.
Legislating has been likened to sausage making for a good reason – it’s not a pretty process, and it’s easy to lose focus. Republicans can and must concentrate not just on repealing Obamacare, but replacing it with a law that works better.
The Senate Republican discussion draft represents tremendous progress. Collapsing insurance markets would receive a boost with a $15 billion short term stabilization fund. Obamacare’s individual and employer mandates would go, along with the law’s taxes. In fact, repealing Obamacare is a giant tax cut for the American people, doing away with all kinds of taxes that drive up the cost of everything from medical devices to prescription drugs.
The proposal would replace Obamacare’s subsidies with more market oriented tax credits benefitting people whose income falls between the federal poverty level and 350% of that rate. The tax credits are advanceable and refundable. That is, people who currently pay zero federal income taxes would receive the full amount of the credit in the form of a payment that can be used to help pay for health insurance.
Several important aspects of the current law are preserved, such as coverage for pre-existing conditions, and allowing children to stay on their parents’ insurance plan to age 26.
Several Republican Senators, including Ted Cruz of Texas, stopped short of endorsing the Senate discussion draft, looking to ensure that premiums under the new law come down. This is wise – Republicans will be held fully accountable for how health insurance markets work after Obamacare is relegated to the ash heap of history, so the insistence that rates must come down because of a better performing insurance markets is both smart policy and smart politics.
Specifically, among other reforms Cruz wants Health Savings Accounts expanded so Americans can pay for insurance premiums with pre-tax income. This is an important reform that would correct a 70-year-old quirk in the tax code that makes health insurance premiums tax deductible when employers pay for it, but not when purchased by an individual. This fix would provide a big cost savings for many families while leveling the tax treatment of employer and individually purchased insurance plans.
Tacking the lawsuits that needlessly drive up health insurance costs, Cruz wants to see incentives for states to adopt laws like California’s that cap punitive damages in malpractice cases. California’s MICRA law limits non-economic damages in malpractice cases to $250,000. Other states have no such cap – a big bonus for trial lawyers.
With the GOP in charge at both ends of Pennsylvania Avenue, Republicans must fulfill the promises of repealing Obamacare, fundamentally reforming and lowering federal taxes, and securing our southern border. These big ticket legislative items will have a real positive impact on Americans’ quality of life while proving Republicans can serve as an effective governing party.
Great progress has been made, negotiations continue, and there is now great cause for optimism that Obamacare’s days are finally numbered.