Obamacare Replacement Plan Primer

Republicans have proposed many plans to repeal and replace Obamacare. Here is a primer explaining the most important aspects of each plan.

Speaker Ryan’s plan:

• Eliminates the individual mandate to obtain health insurance
• Eliminates subsidies for individuals for health insurance
• Eliminates Medicaid expansion by 2020
• Grants individuals a tax credit between $2,000-$4,000, with higher allotments for older Americans
• Doles out $10 billion per year to states for “innovation grants” that would create high-risk pools for people with pre-existing conditions
• Caps Medicaid spending per person
• Imposes a tax on employer-sponsored health care plans above the 9oth percentile

Read Paul Ryan’s leaked draft bill here.

Senator Rand Paul’s Plan: The Obamacare Replacement Act

• Eliminates the individual and employer mandate
• Authorizes a tax credit up to $5,000 for individuals and families that contribute to Health Savings Accounts to further incentivize health savings
• Removes the maximum allowable annual contribution limit to HSAs, so that individuals may make unlimited contributions to an HSA
• Allows the use of HSA funds to pay for insurance premiums
• Expands Association Health Plans (AHPs) to allow small business owners and individuals to band together across state lines through their membership in a trade or professional association to purchase health coverage for their families and employees at a lower cost; in addition, the bill allows individuals to pool together through any organization to purchase insurance
• Allows the purchase of insurance across state lines

Senators Cassidy and Collins’ Plan: The Patient Freedom Act

• Repeals the individual and employer mandate for health insurance
• Keeps protections for pre-existing conditions
• Allows young adults to stay on their parents’ health plan until age 26
• States to have three options:
  • Retain the Affordable Care Act, allowing individuals and small business able to purchase insurance on state exchanges and low-income residents can receive federal subsidies to cover the cost of the program. States that expanded Medicaid, can continue to provide increased Medicaid coverage
  • States can receive most of the federal funding, including federal funding, Medicaid expansion, and subsidies to create tax-free Health Savings Accounts for low-income citizens. Low-income residents can use the HSAs to purchase insurance and pay for health care
  • Allow states to create an alternative solution without federal assistance. States would retain the power to design and regulate insurance markets without federal intervention