Just a few weeks after Senate Finance Chairman Orrin Hatch and others unveiled a plan to replace the Affordable Care Act (ACA), or Obamacare, House Ways and Means Chairman Paul Ryan and two other House Republican chairmen have also announced the outlines of a proposal with an accompanying op-ed. Ryan is joined by John Kline, chairman of the Education and Workforce Committee, and Fred Upton, chairman of Energy and Commerce – all key committees when it comes to health care.
As with the Hatch plan, it is important to focus on the core substance of the proposal and not on the “off-ramp” or “repeal” language accompanying Republican plans. Politics and positioning will shape the language of the health debate over the next several months. That’s Washington. But the real question is this: does the Ryan proposal have ingredients that could be part of a future agreement on the long-term shape of the American health care system? I believe it does.
Insurance Protections. For one thing, the outline includes a commitment to several insurance protections for Americans with health concerns. These include prohibitions on insurers imposing lifetime limits on benefits, or unfairly cancelling coverage, or discriminating against individuals with pre-existing conditions. In addition, Americans enrolled in coverage would have the right to renew coverage, and young adults generally could remain on their parents’ plan. Such provisions overlap with protections in the ACA. So there is plenty of room for broad bipartisan agreement on a range of protections.
Tax credits. Another reason for optimism is that the Ryan-Kline-Upton outline embraces a refundable, advanceable tax credit for health coverage meaning the assistance would be available to those paying little or no tax and would be available when premiums are due. Moreover, the credit would be available for coverage outside exchanges including, presumably, for those Americans affected by an adverse decision in King v. Burwell. And like the Hatch proposal, the House chairmen’s plan would adjust the credit by age, which is a rough approximation of the cost of insuring different segments of the population. This credit structure opens the door to a more comprehensive agreement on subsidies.
So again, there is enough overlap with the exchange subsidy provisions in the ACA that an agreement on a structure of premium subsidies is feasible either within the framework of the ACA or in other legislation. In addition, Ways and Means Chairman Ryan contrasts refundable credits with the inadequacy of today’s tax exclusion for employer-sponsored coverage. He and Senator Hatch will be central players in tax reform over at least the next two years including a major opportunity to redesign tax relief for health insurance.
State flexibility. The House chairmen’s plan would also give states an “off ramp” from the ACA to pursue their own vision of coverage and avoiding federal mandates as they do so. That sounds radical, but Section 1332 of the ACA also provides sweeping waivers to states, starting in 2017, to pursue the goals of the ACA without the legislation’s individual and employer mandates or the need to set up exchanges. To be sure, the House proposal doubtless envisions a much looser set of goals for states and no requirement that states must seek a waiver from Washington. But if Section 1332 were merely to be amended to take effect immediately, it would go a long way towards achieving the chairmen’s vision of state flexibility as well as giving options for addressing a King decision against subsidies in federal exchanges.
The general strategy of giving states considerable latitude to devise their own ways of achieving broad national goals is thus shared both by Republican health committee chairmen in the House and Senate and – in the form of Section 1332 – by the architects of the ACA. There is enough room available within these boundaries to find agreement on state flexibility.
It’s unfortunate that the Obama Administration and a bipartisan group of congressional lawmakers were not able to draw on broadly held ideas about protections, tax assistance and state flexibility to craft a bipartisan health reform in 2010. But the House chairmen’s plan, like the earlier Hatch, Burr and Upton plan, is a good starting point for a fresh discussion of lasting, bipartisan health reform.