PENSION AND BENEFITS BLOG

Republicans revealed their much anticipated proposal to replace Obamacare, integrating popular parts of the Affordable Care Act with Republicans’ election-year policy agenda.

The plan would keep cornerstones of Obamacare such as pre-existing condition protections, safeguards for sick employees from rescissions and allowing dependents up to age 26 to stay on their parent’s plan.

Similar to Obamacare, the plan would promote healthy behavior through wellness plans that comply with the ADA and GINA regulations.  However, the plan criticizes recent EEOC wellness plan regulations.

The replacement plan proposes policy alternatives such as expanding health savings accounts, allowing individuals to purchase coverage across state lines and permitting small businesses and individuals to form insurance purchasing pools, known respectively as association health plans and individual health pools.

The Republican plan would encourage uninsured individuals to purchase coverage during a one-time enrollment period, regardless of how sick or healthy they are.  Individuals that forego coverage would be able to purchase it at a later date but forfeit continuous coverage protections and be subject to higher health insurance costs.

Like Obamacare, the plan would also provide assistance for individuals to purchase health insurance, but use a monthly advanceable, refundable tax credit adjusted for age.

The plan would cap the tax exclusion for employer-provided health benefits to replace the ACA’s “Cadillac Tax” on high-cost plans. The proposal also would eliminate the ACA employer mandate and definition of “full-time employee.”

The plan would shift much regulation implementation to the states, proposing funding of $25 billion each for State Innovation Grants and high-risk pools.  The State Innovation Grants would potentially be distributed on a sliding performance scale to states that reach quotas for the uninsured, small group premiums and individual premium reduction.  Individuals priced out of coverage could turn to high-risk pools that would cap premiums and ban wait lists.

The Republican plan would modify Obamacare’s three-to-one age rating ratio to a default five-to-one ratio.  The ratio, which is used to adjust premium amounts based on an individual’s age, would be able to be expanded or narrowed by states.

The plan would eliminate Obamacare's Medicaid expansion as disproportionately favoring low-income Americans and gives control of Medicaid to the states through block grants or a per-capita allotment.

Beginning in 2024, Medicare participants would be able to choose a private plan instead of the traditional Medicare fee-for-service plan.

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