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Conservatives: Paul Ryan’s Healthcare Plan Replaces Obamacare with Obamacare-Lite

Conservatives remain critical of House Speaker Paul Ryan’s plan to repeal and replace Obamacare, arguing that it will create “Obamacare-lite.”

Former House Freedom Caucus Chairman Jim Jordan says he does not support Ryan’s American Health Care Act. He said, “This is Obamacare by a different form. They’re still keeping the taxes in place and Medicaid expansion, and they’re starting a new entitlement.”

Congressman Dave Brat (R-VA) explained that he would vote against the Obamacare bill in its current form because “The bill maintains many of the federal features including a new entitlement program as well as most of the insurance regulations.” He continued, “Now [they] are saying we’re going to do repeal and replace but the bill does nothing of the sort. [Speaker] Paul Ryan has always said the entire rationale for this bill is to bend the cost curve down, and so far I have seen no evidence that this bill will bring the cost curve down.”

The House Ways and Means Committee, as well as the House Energy and Commerce Committee, will mark up the bill this week. Republican leadership hopes to send the bill to the Senate within three weeks.

A Republican Study Caucus memo stated that: “This is a Republican welfare entitlement. Writing checks to individuals to purchase insurance is, in principle, Obamacare. It does allow more choices for individuals, and is more patient-centered, but is fundamentally grounded on the idea that the federal government should fund insurance purchases.”

Although many conservatives chided the Obamacare package, it is unclear whether Republicans will vote for it. RSC chairman Mark Walker (R-NC) thanked the GOP leadership, saying ,“I applaud the movement and believe it is the right direction.”

Conservatives worry that tax credits for individuals to purchase health insurance will create a new “entitlement program,” preferring a tax deduction. Republican leadership and Health and Human Services Secretary Tom Price argue that tax credits would benefit low-income Americans more so than a tax deduction.

Republicans also worry about the Republican leadership’s plan to phase out Medicaid by 2020. The RSC memo stated, “continues to contribute to the worsening of the federal and state budgets by incentivizing states to maintain expansion or to initiate new expansions and leaving the federal government picking up the majority of the bill.”

Senator Rand Paul (R-KY), along with Congressman Meadows (R-NC), wrote in an op-ed that the Republican leadership wants to retain several provisions of Obamacare:

  1. Leadership wants to keep Obamacare-like subsidies to buy insurance but rename them refundable tax credits (families will be given up to $14,000 dollars of other people’s money)
  2. Leadership wants to keep the Obamacare Cadillac tax but rename it a tax on the top 10% of people who have the best insurance.
  3. Leadership wants to keep the individual mandate but instead of mandating a tax penalty to the government they mandate a penalty to the insurance company (can it possibly be Constitutional to mandate a penalty to a private insurance company?)
  4. Leadership wants to keep $100 billion of the insurance company subsidies from Obamacare but call them “reinsurance.” (Why? Because insurance companies love guaranteed issue as long as the taxpayer finances it!)

Paul and Meadows said they will introduce their conservative vision for replacing Obamacare. “If anyone tells you there isn’t a plan that can both keep our promises to repeal, and work in a bipartisan, open way for replace, tell them conservatives have a plan to do just that. Now let’s hope our leadership will listen, because it is the only way they’re going to get our votes,” the lawmakers said,

Paul, frustrated by the Republican leadership’s secrecy, tried to gain access to the bill in the Capitol building. Congressional leadership denied Paul entrance. Paul argued that this level of secrecy is wrong. “In my state of Kentucky, it is illegal to do this,” he said, adding, “You can’t do this. You can’t have legislation locked behind closed doors in my state.”

“I think there is a bill in there,”Paul said. “They told me I can’t have a copy. I guess I’m upset that I have to get the bill from the media. You would think that it would circulate around. There are people describing various aspects of it–pretty significant in detail, but without letting any of us see it in writing, that’s just not fair.”

“I have been told by others I should sit back and take it: ‘You will see it. You will get it. You will take the House version or nothing else.’ I don’t think that’s how the America process should work,” he said.

Rand Paul’s staff searched for the bill:

 

Senator Paul tweeted that conservatives will not support Obamacare Lite:

Governor Paul LePage (R-ME) said that he is “very, very discouraged and disappointed,” by the House Republican plan to repeal and replace Obamacare. He continued: “Basically it’s not much better than—in fact, I don’t know, they haven’t scored it yet, so we don’t know what the cost is. But based on what I see and I’m reading and what has happened here in Maine over the last 15 years, I don’t think it’s an improvement.”

Daniel Horowitz, Senior Editor at Conservative Review, tweeted:

Congressman Jason Chaffetz (R-UT) said that Americans have to choose health care over getting the new iPhone. Chaffetz said: “They will have to make those decisions themselves.” Chaffetz’s comments mirror similar rhetoric that Obama used to justify young Americans purchasing health insurance on Obamacare exchanges rather than upgrading their iPhones. Obama explained back then, “I am not allowed, for security reasons, to have an iPhone,” and had an NSA engineer craft his own secure Blackberry. “I don’t know what your bills are. I have noticed that Sasha and Malia seem to spend a lot of time on it. My suspicion is that for a lot of you, between your cable bill, your phone bill, you’re spending more than 100 bucks a month.”

The Republican leadership plan will replace Medicaid expansion under Obamacare with a per-capita allotment, as an alternative to block granting Medicaid to the states. The Ryan plan phases out Medicaid expansion by 2020. If states choose not to expand Medicaid, they will receive $2 billion a year for “safety net funding.”

The House GOP plan will not grant control of the essential health benefits programs to the states, unlike the leaked February 10 version which did. The Obamacare bill will include a 30 percent surcharge for those who sign up for health insurance outside of the regular enrollment period. Avik Roy, a staff writer for Forbes, argues that this is an arbitrary price control. Roy explained, “The 30 percent provision incentivizes those who face much higher costs to sign up, forcing insurers to cover them at a loss. This seems like a recipe for adverse selection death spirals.”

Roy argues that the fatal flaw with the Ryan plan is that creating flat, non-means tested tax credits will “price many poor and vulnerable people out of the health insurance market.” For those on Medicaid, patients receive roughly $6,000 per patient in Medicaid subsidies, and those barely above the poverty line receive $3,000 in tax credits. Americans just below the poverty line face a strong disincentive to make more money, trapping Americans in a cycle of poverty.

The Ryan plan, the American Health Care Act, will phase out tax credits for those making $75,000 or those who file jointly $150,000. These thresholds for tax credits are more generous than Obama’s Affordable Care Act, which phases out subsidies around an income of $48,000. Avik Roy, of Forbes, argues that the tax credits availability might encourage employers to drop health coverage for their high-income employees.

Conservatives balked at the February 10 leaked draft bill that would institute a tax on employer-sponsored health care plans above the 90th percentile. The AHCA draft no longer contains that provision, yet only postpones the Cadillac tax until 2025.

President Donald Trump himself was not overly optimistic on Twitter about the Paul Ryan Obamacare package:

Specifically, Trump said, it is now up “for review and negotiation” without endorsing it.

Even so, his administration did formally endorse it through Ryan ally and Health and Human Services Secretary Tom Price–a former member of Ryan’s leadership team as chairman of the House Budget Committee after Ryan left the post during his time in the House.

But conservatives remain unconvinced by the Republican leadership’s plan to repeal and replace Obamacare. Avik Roy states, “Expanding subsidies for high earners, and cutting health coverage off from the working poor: it sounds like a left-wing caricature of mustache-twirling, top-hatted Republican fat cats. But not today.”

And perhaps even worse for Ryan and his allies: Even Sen. Roy Blunt (R-MO), a member of the Senate GOP leadership team, does not believe the Ryan plan has enough Republican support to make it through Congress.

“Well, I haven’t had time to look at it in great depth yet, so we’ll see,” Blunt said, per CNN, on a local radio program on Tuesday. “What I don’t like is it may not be a plan that gets a majority vote and let’s us move on. Because, we can’t stay where we are with the plan we’ve got now.”

So, as Blunt says, this bill might not pass the House and there are also legitimate questions as to whether this bill could pass the GOP senate. That’s because at least three Republicans–Paul, and Sens. Ted Cruz (R-TX) and Mike Lee (R-UT)–have said they would not vote for such an Obamacare-lite package that Republican leadership was drafting in secret. With only 52 Republicans in the Senate, and such a measure unlikely to garner any Democratic backing whatsoever, three Republicans opposing the measure would be enough to block it there.

If Ryan put forward a healthcare bill that can’t even pass the House or the Senate–or either chamber of Congress–then got the Trump administration’s Health and Human Services Secretary to endorse it, he could be severely hurting the credibility of the Trump administration as part of a fool’s effort to advance his own political agenda. Hurting President Trump is not a wise move for Ryan, as many reports surfaced around the time of the Nov. 8 election that there are already more than enough House Republicans who would vote for a Republican alternative to Ryan as Speaker of the House–but the only reason they called off the rebellion for the time being was because Trump won and Republicans kept majorities in both chambers of Congress. Infuriating Trump with incompetence on the healthcare system–and saddling the president with their issues, since Democrats are already inaccurately calling Ryan’s creation “TrumpCare”–may spark the rebellion again.

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