Republicans can stop worrying about what they’re going to do after they repeal Obamacare. Rand Paul just revealed his Obamacare Replacement Act and it details every step the government needs to make the healthcare market free again. There are a variety of provisions that, in addition to fully repealing Obamacare, outline how the government can expand tax credits and health savings accounts, initiate individual and association pool reform, allow for interstate insurance, and even protect individuals with preexisting conditions. In other words, it does everything that Republicans want and more without expanding government power or spending any tax dollars.
Here are the highlights from the full 1,500 word bill condensed down to the most consequential provisions:
- Individual and employer mandates, community rating restrictions, rate review, essential health benefits requirement, medical loss ratio, and other insurance mandates.
Protecting Individuals with Pre-Existing Conditions
- Provides a two-year open-enrollment period under which individuals with pre-existing conditions can obtain coverage.
- Restores HIPAA protections which guarantee those within the group market could obtain continuous health coverage regardless of preexisting conditions.
Equalize the Tax Treatment of Health Insurance
- All individuals are able to exclude the premium amount from their taxable income (previously only individuals who received health insurance through an employer were able to).
- Universal deduction on both income and payroll taxes regardless of how an individual obtains their health insurance.
Expansion of Health Savings Accounts
- Provides individuals the option of a tax credit of up to $5,000 per taxpayer for contributions to an HSA and removes the maximum allowable annual contribution.
- Eliminates the requirement that a participant in an HSA be enrolled in a high deductible health care plan
- Allows prescription and OTC drug costs to be treated as allowable expenses of HSAs.
- Allow purchase of Health Insurance from HSA Account
- Allows qualified expenses incurred prior to HSA establishment to be reimbursed from an HSA as long as the account is established prior to tax filing.
- Allows an account holder’s HSA to rollover to a child, parent, or grandparent, in addition to a spouse.
- Creates Bankruptcy Protections for HSAs as Retirement Funds
- Expands allowable HSA expenses to include equipment for physical exercise or health coaching, including weight loss programs and dietary and nutritional supplements
- Allows HSA funds to be used for periodic fees paid to medical practitioners for access to medical care and pre-paid physician fees
Pool Reform for the Individual Market
- Establishes Independent Health Pools (IHPs) in order to allow individuals to pool together for the purposes of purchasing insurance.
- Amends the Public Health Service Act (PHSA) to allow individuals to pool together to provide for health benefits coverage through Individual Health Pools (IHPs). These can include non-profit organizations so long as the organization does not condition membership on any health status-related factor.
- Requires that the IHP will provide insurance through contracts with health insurance issuers in fully insured plans and not assume insurance risk with respect to such coverage. Allows the IHP to provide administrative services to members, including accounting, billings, and enrollment information.
Interstate Market for Health Insurance
- Allowing insurers licensed to sell policies in one state to offer them to residents of any other state.
- Exempts issuers from secondary state laws that would prohibit or regulate their operation in the secondary state
Association Health Plans
- AHPs allow small businesses to pool together across state lines through their membership in a trade or professional association to purchase health coverage for their employees and their families.
- Amends ERISA to define AHPs and allow for their treatment as if they were large group single employer health plans
Increasing State Flexibility to Conduct Medicaid Waivers
- Provides new flexibilities to states in their Medicaid plan design, through existing waiver authority in current law.
- This provision would allow states to make changes to their Medicaid plans without interference from Washington.
As you can see, Rand Paul’s Obamacare Replacement Act is a win-win for Republicans and President Trump who are desperate for a solution. Instead of waiting around another year like Paul Ryan suggested might happen they get a quick fix immediately. This bill will stop the Obamacare’s unraveling and begin repairing the damage the law has caused to the healthcare industry and insurance markets. It can’t wait any longer. As soon as Obamacare is finally repealed it must be replaced, and Rand Paul’s bill is the most comprehensive measure for accomplishing that.