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  • A GOP plan for life after Obamacare

    The U.S. Supreme Court will soon decide King v. Burwell, a case that will determine the future of the Affordable Care Act.

    A ruling against the law would strip away federal health insurance subsidies for more than 6 million Americans in the 37 states using the federal website Healthcare.gov. That would effectively gut Obamacare.

    If that happens, Republicans must be ready with a politically viable replacement to reform our health care system and empower patients and doctors — not the federal government.

    While there are many Republican plans being circulated, Republican Rep. Tom Price of Georgia, has offered a plan that’s worth embracing.

    The former orthopedic doctor recently introduced the Empowering Patients First Act. It would both repeal Obamacare and install market-based reforms. Unlike Obamacare, this bill will actually expand access to care while lowering health care costs. Republicans should rally behind this plan.

    First, Dr. Price’s plan acknowledges that Obamacare has failed and that no amount of tinkering can or should save it.

    Just consider the disastrous consequences of the law’s employer mandate. This provision requires businesses with 100 or more workers to provide health insurance to employees or face a $40,000 tax penalty. Companies must pay another $2,000 penalty for each additional hire beyond that threshold.

    Starting on Jan. 1, 2016, the mandate will apply to those employers with 50 or more workers.

    Such a requirement suppresses economic growth. Firms stay small to avoid exceeding the 49-worker limit. Employers also have to stop employees from working more than 30 hours per work, lest they qualify as full-time under Obamacare.

    According to a recent survey from the National Small Business Association, the employer mandate has prevented one out of every three small businesses from hiring new employees.

    Second, Dr. Price’s plan doesn’t try to force a “just” health care system upon patients and employers. Instead, the plan introduces more competition into the insurance sector and empowers individual consumers to make their own care choices.

    For example, his bill would permit both individuals and small businesses to buy health insurance across state lines. This reform would create a bigger and more competitive market, leading to lower prices and higher quality of coverage.

    Third, Dr. Price’s bill would provide Americans with a refundable tax credit for purchasing insurance in the individual marketplace. And this credit would be pegged to age, not income. Adults under 35 would receive $1,200 a year, while those over 50 would get as much as $3,000. This credit would help decouple insurance from employment. Workers would no longer suffer a tax disadvantage by shopping for coverage on the open market.

    Fourth, Dr. Price’s plan offers a one-time, $1,000 tax credit for Health Savings Accounts, which allow people to store pre-tax dollars for health care expenses. The bill would also increase the federal limits on yearly contributions to these accounts and offer incentives to spend that money wisely. These reforms would grant consumers more control over how they spend their health care dollars.

    Finally, the Empowering Patients First Act provides states with block grants for the creation of high-risk pools to cover patients with pre-existing conditions. That would allow states to direct funds to those folks most in need of care. And by isolating the sickest patients from the insurance pool, states could keep rates low for healthy patients.

    Dr. Price’s plan isn’t perfect. Notably, its refundable tax credits for private insurance purchases actually go to insurers instead of consumers. But such details can easily be amended.

    The upcoming King v. Burwell decision could do more than decide the future of Obamacare. It could also empower Republicans to replace this broken law with one that would provide affordable, accessible, quality care for all Americans. The GOP should seize this opportunity and support the Empowering Patients First Act.

    Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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