Rand Paul's "Obamacare Replacement Act"
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The Obamacare Replacement Act was introduced by Senator Rand Paul (R-Ky.) on January 24, 2017. The bill would repeal major provisions of the Affordable Care Act, commonly known as Obamacare, though it would not repeal the law in its entirety. The individual and employer mandates, essential health benefits mandate, and various other provisions impacting the insurance industry would be repealed. The bill would provide for a $5,000 tax credit for contributions to a health savings account and a tax deduction for the purchase of an individual plan, similar to the deduction for employer-sponsored benefits. Instead of an individual mandate to increase insurance coverage, the bill would allow individuals to pool together to purchase plans.
Text of plan
Below is a summary of the Obamacare Replacement Act as published by Senator Rand Paul (R). For a full text of the bill, click here.
Summary
Senator Rand Paul's (R-Ky.) Obamacare Replacement Act would repeal certain provisions of the Affordable Care Act (ACA), rather than repeal the law in its entirety. The bill would repeal the individual and employer mandates, the community rating requirements, premium rate reviews by the federal government, the essential health benefits mandate, medical loss ratio requirements, and various other provisions impacting the insurance market. The bill would not repeal the ACA's Medicaid expansion.[1]
In place of the ACA's advanced premium tax credits, the bill would allow individuals who purchase insurance on their own to claim a deduction on their taxes, meaning they could lower their taxable income by the amount it costs to purchase an insurance plan. This is similar to how employer-sponsored health insurance is treated under the tax code. In addition, the proposal would provide individuals with a $5,000 annual tax credit for contributions made to a health savings account (HSA).[1]
Under the act, insurers would no longer be prohibited from denying coverage to individuals with pre-existing conditions. Instead, such individuals would be given two years to enroll in a health plan, and thereafter would only be protected from a denial of coverage if they maintain continuous coverage. Individuals with pre-existing conditions would still be able to obtain coverage at any time in the group, or employer, market, as they've been able to since the passage of HIPAA.[1]
The bill would expand the use of HSAs by making several changes to their legal structure. Under the bill, annual contributions to an HSA would no longer be capped and the accounts would no longer be tied to high-deductible health plans. Account owners would be able to withdraw funds to purchase prescription and over-the-counter medications, health insurance premiums, exercise equipment, dietary and nutritional supplements, and physical fitness programs, which previously have not been allowable expenses. The bill would also protect HSA funds in the event of bankruptcy.[1]
The bill includes a few provisions intended to expand access to health insurance coverage. Under the proposal, insurers could sell policies across state lines. The bill would also allow individuals to pool together to purchase health coverage. Coverage could also be offered by nonprofit entities such as churches or alumni associations. The bill would also amend regulations regarding association health plans, which allow small businesses to pool together across state lines through trade or professional associations in order to purchase coverage. The plan would allow association health plans to be treated as large group, employer-sponsored, self-insured plans.[1]
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See also
Footnotes
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