Rand Paul Plan Would OK Denying Coverage for Pre-Existing Conditions

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By Alex Ruoff

Sen. Rand Paul (R-Ky.) is gathering support among Republican lawmakers for an ACA replacement plan designed to make health insurance less expensive by lifting many of the health law’s key requirements, the senator told Bloomberg BNA Jan. 9.

Paul’s replacement for the Affordable Care Act would both lift the unpopular requirement that all Americans have insurance and the more-popular requirement that insurers can’t deny coverage to people with pre-existing conditions. The plan, similar to those floated by House Republicans recently, would expand use of tax-advantaged health savings accounts to help people afford the cost of health services.

This replacement plan doesn’t aim to protect coverage for all of the 20 million or more Americans who gained health insurance under the ACA, Paul said. Instead, it looks to drive down the cost of health insurance and health services for individuals and Medicaid costs for states, he said.

“What we need to do is make available inexpensive insurance so healthy people will buy it,” Paul said.

Paul said he still supports using the budget reconciliation process to repeal the health law, but acknowledged a replacement plan would need to be passed outside reconciliation and require support from some Democrats.

Paul met recently with Rep. Tom Price (R-Ga.), President-elect Donald Trump’s pick to head the Department of Health and Human Services, and conservative House lawmakers to discuss his ACA replacement plan. He said both House conservatives and Price were supportive of his ideas.

The Kentucky senator wants Republicans to install his replacement at the same time they repeal the ACA, which could happen shortly after Trump is inaugurated Jan. 20. However, forcing an immediate replacement could compromise the repeal effort, a conservative health policy analyst told Bloomberg BNA.

Republican leaders in Congress have largely supported a plan to pass a repeal of the ACA as soon as possible but delay its effective date for as long as two years to allow them time to come up with a replacement to avoid a disruption of the health insurance market.

However, what provisions of the health law will be lifted remains unclear.

The Paul Plan

Paul’s replacement plan tracks along the plans other conservatives have introduced in recent weeks, with some key differences. He’s among those calling for the most aggressive repeal and replace timeline as well.

The far-right Republican Study Committee Jan. 4 released a replacement proposal that closely mirrors what the group put out last year. The plan, supported by Study Committee Chairman Rep. Mark Walker (R-N.C.) and Rep. Phil Roe (R-Tenn.), would fully repeal the ACA on Jan. 1, 2018, though it doesn’t include a replacement timeline.

The Study Committee’s bill would create a standard deduction of $7,500 for individuals and $20,500 for families, instead of using tax deductions for employer-sponsored insurance. It also would expand support for high-risk pools and allow individuals to purchase insurance across state lines.

Paul’s plan would lift nearly all the ACA’s major provisions and mandates, including the mandate that certain employers give their employees health insurance coverage, and would roll back requirements that define what benefits insurers must provide enrollees, known as essential health benefits.

Similar to the Study Committee’s plan, Paul wants to expand health savings accounts to allow Americans to use them to pay for health insurance premiums, prescription drugs, over-the-counter medications and diet plans.

However, Paul’s plan doesn’t rely on high-risk pools to support people with serious and expensive health conditions. Instead, Paul said those people will likely be covered by Medicaid programs.

Paul’s plan also looks to help people on the individual insurance market—typically self-employed business owners or employees of small companies—by allowing them to join associations that offer group health plans. He said this would allow insurance companies to better pool risk.

Under the ACA, low-income Americans shopping on the individual market can qualify for federal subsidies.

Immediate Replacement

Senate Democrats have repeatedly warned that repealing the ACA without an immediate replacement would disrupt the individual health insurance market. Some industry groups have warned that many insurers may stop offering insurance to individuals if they’re uncertain about an ACA replacement.

But requiring an immediate replacement for the ACA could compromise repeal efforts because it would require support from Democrats, James Wallner, group vice president for research at the conservative Heritage Foundation, told Bloomberg BNA Jan. 9.

Many of the ACA’s key provisions can be repealed without Democrats’ support through the budget reconciliation process, which requires only a simple majority in both chambers to pass legislation. However, budget reconciliation can only be used to pass legislation that affects the federal budget, which may not include many ACA rules for insurers or replacement provisions.

Republicans would need to work with Democrats to pass a replacement, Wallner said. Liberals would likely sidetrack any efforts to completely overhaul the insurance industry, he said.

Paul said he thinks vowing to replace the ACA along with repeal could persuade some Democrats to compromise.

“We’re going to need Democrats,” Paul said. “They need to decide if they’re so wedded to Obamacare that they need to obstruct this process rather than be a part of it.”

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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