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Republicans Release Health Law Replacement Plan

By Rebecca Adams, CQ Roll Call

February 4, 2015 -- A GOP plan to replace the 2010 health care law would tax workers' medical coverage if it was valued at more than $12,000 for an individual or $30,000 for a family.  

The blueprint, released last week, is backed by Senate Finance Chairman Orrin G. Hatch, R-Utah; Finance member Richard M. Burr, R-N.C., and House Energy and Commerce Chairman Fred Upton, R-Mich.

The plan mirrors a proposal Hatch and Burr released last year and faces an almost certain veto should it reach President Barack Obama's desk. Though Republicans don't plan on introducing it as a bill in the immediate future and it lacks critical details such as a cost estimate, the plan offers details about how Republicans could replace the health care overhaul (PL 111-148, PL 111-152) if a GOP candidate captures the White House in 2016.

More immediately, it could help frame debate this summer if the Supreme Court strikes down subsidies for private insurance in states that rely on the health law's federal marketplace for enrollment. Plaintiffs in a case to be argued March 4 contend Congress only intended federal subsidies for insurance to be available in states that run their own enrollment websites, which could result in about 13 million Americans losing subsidies in 2016, according to the nonpartisan Kaiser Family Foundation.

The added taxes on workers' insurance would raise revenue and help hold down rising medical costs, and it and is one of the only changes from the GOP replacement plan put forward last year by Hatch, Burr and then-Sen. Tom Coburn, R-Okla. The previous plan also capped the tax exclusion for workers' coverage, but did so through a formula that some criticized as too complicated. 

This year's version includes more robust medical malpractice limits, according to Republican aides. GOP lawmakers want to cap pain-and-suffering damages in lawsuits and attorneys' fees, as well as encourage states to adopt additional changes.

A third change from last year is that the group included a long-held GOP principle that consumers should be able to buy insurance offered in different states. 
Aides do not know how many people would have insurance under the proposal or how much it would cost.

Republicans would repeal most of the 2010 law, including mandates that most people obtain coverage and that most larger employers offer insurance to workers or face fines.

The proposal would wipe out the law's ban on annual coverage limits by insurers, requirements that insurance cover certain medical services and a rule that patients can get preventive care without having to pay out-of-pocket costs. And it would significantly cut spending on coverage for low-income people by repealing the law's expansion of Medicaid, which opens up the program to those with incomes of up to 138 percent of the federal poverty level in states that choose to expand coverage. The proposal would cap Medicaid spending. 

But the plan would retain the health care overhaul's Medicare cuts for providers such as hospitals.

The Republican trio of lawmakers also would keep a ban on lifetime limits on insurance coverage and continue to allow adult children to stay on their parents' insurance plans until age 26, unless states decide to opt out.

Coverage Denials

The plan would replace the health law's ban on higher charges or coverage denials for people with pre-existing medical conditions with narrower protections. Under the GOP plan, insurers could charge higher prices to cover preexisting conditions if a consumer is uninsured for more than two months or unless the person previously had coverage for less than 18 months.

The addition of Upton to the plan's supporters signals that Republicans in both chambers hope to coordinate their message on health care. Upton said Republicans are "presenting these ideas to the American people and offering a path to the health coverage and care they want."

The Republicans are willing to further tweak their plan.

"This plan is achievable, and above all, fiscally sustainable," said Hatch. "And unlike the passage of Obamacare, which was done in secret, we welcome input from the American people."

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