Full Repeal Must Include the Regulatory Architecture of Obamacare

Background: On March 6th, House Republican Leadership released a long anticipated bill that partially repeals and replaces Obamacare named the American Health Care Act (AHCA). The House of Representatives is scheduled to vote on final passage this Thursday, March 23rd. While the bill contains many provisions that should concern conservatives, the main problem with the repeal portion of the bill is the failure to repeal most of the insurance regulations that contribute to the rising cost of health care. The Republican proposal not only maintains the overall regulatory framework of Obamacare, but also subsidizes that regulatory framework through a new refundable tax credits aimed to help individuals buy their own health care plans – plans that will remain highly regulated and overly expensive.

Obamacare Regulations Defined: The heart and soul of Obamacare contains numerous insurance mandates and regulations that restrict consumer choice and drive up the cost of health care. The four most problematic regulations include guaranteed issue, community rating, essential health benefits, and actuarial value.

1.) Guaranteed Issue: Prohibits insurance companies from denying customers with pre-existing conditions. This is the provision that necessitated the individual mandate in Obamacare, which has been replaced in the AHCA by the 30% surcharge in the individual market paid directly to insurance companies. Congress should address this issue by simply extending existing protections in the employer market to the individual market once Obamacare’s regulations have been repealed to solve the “waiting until you are sick to get coverage” issue.

2.) Community Rating: Prevents insurance companies from setting prices based on the age, health status and/or gender of the customer. The AHCA only moves the age rating ratio that Obamacare uses from 3:1 to 5:1, but does not address health status or gender.

3.) Essential Health Benefits: Outlaws inexpensive and customized health insurance plans by requiring insurance companies to cover comprehensive benefits, even unnecessary ones including maternity care for single males, specific rehabilitative services, preventive services, and others.

4.) Actuarial Value: Abolishes cheaper, catastrophic plans by requiring insurance companies to cover a certain percentage of total health care costs. The AHCA does get rid of this regulation, which is one of the only positive reforms in the bill.

Some Republicans have argued Congress cannot repeal Obamacare’s insurance mandates and regulations through budget reconciliation because it does not have a clear budgetary impact. In reality, Obamacare’s regulatory architecture imposes significant costs on taxpayers and is inseparable from the rest of the law. These regulations are one of the main reasons why health care costs are rising and federal spending is increasing under this law. Congress has the legislative tool it needs to repeal Obamacare’s regulatory architecture through budget reconciliation.

Full Obamacare Repeal: Republicans cannot maintain Obamacare’s regulatory structure and claim to have repealed the law. Without repealing these insurance regulations – the regulatory architecture of Obamacare – Republicans will fail to keep their seven year promise to fully repeal Obamacare, and health care costs will continue to rise. According to Heritage Action CEO Michael A. Needham:

“Many Americans seeking health insurance on the individual market will notice no significant difference between the Affordable Care Act (i.e., Obamacare) and the American Health Care Act. That is bad politics and, more importantly, bad policy. Rather than accept the flawed premises of Obamacare, congressional Republicans should fully repeal the failed law and begin a genuine effort to deliver on longstanding campaign promises that create a free market health care system that empowers patients and doctors.”

Obamacare Timeline Slipping: The ongoing delay over how much of Obamacare to repeal and what to replace it with has caused the timeline to slip. Further delays will push repeal into the congressional Easter recess and dangerously close to when the federal government runs out of funding on April 28th and when insurance companies must submit proposed premiums for 2018 Obamacare plans on May 3rd. Congress could quickly repeal first and then debate and pass free-market health care reform that lowers cost, increases choice, and restores the doctor-patient relationship.

Conclusion: Republicans promised to fully repeal Obamacare, campaigned and won on full repeal, and voted over 60 times to repeal parts or all of the disastrous healthcare law. Congress can repeal Obamacare by simply re-passing the 2015 repeal bill (H.R. 3762) with additional language repealing the insurance regulations. The 2015 bill was supported by nearly every single Republican, but ultimately vetoed by former President Barrack Obama in 2016. Now that voters gave Republicans a unified government including the White House, there are no more excuses. Failure is not an option. Conservatives need to continue pushing for full repeal, including all of the Obamacare insurance regulations, as soon as possible by actively participating in town halls, writing letters to the editor, and contacting their member of Congress.

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Want to talk to your Members of Congress? Check this list

Conservative accountability goes beyond casting a vote. Building a society in which freedom, opportunity, prosperity, and the civil society flourish requires a sustained effort.  That is why we have compiled a non-exhaustive list of upcoming townhalls, all of which provide excellent opportunities to discuss important issues with members of Congress.

As always, make sure to confirm the details with the Representative or Senator’s office.

Email Emily.Stewart@heritageaction.com for any further details.

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How to Repeal and Replace Obamacare under a Trump Administration

Background: Republicans promised the American people a full repeal of Obamacare dating back to 2010, when the health care law was first passed. In fact, since Republicans took control of the House in 2010, Congress voted over 60 times to repeal parts or all of the law. Republican Congressional Leadership and President-elect Donald Trump have all promised to repeal this unaffordable, unworkable, and unfair law.

In 2015, Congress used a filibuster-proof process known as budget reconciliation to pass an Obamacare repeal bill (H.R. 3762), that was ultimately vetoed by former President Barrack Obama in 2016. Now that the American people voted to keep Republican majorities in both chambers of Congress and give Republicans the White House, Congress must act immediately to repeal Obamacare once and for all. There are no more excuses.

Obamacare “Two Budget” Repeal Strategy: Just as they did in 2015, Republicans should use budget reconciliation to repeal Obamacare. Budget reconciliation allows Congress to pass legislation with a simple majority in order to avoid a filibuster in the Senate. Ironically, Democrats used this same method to help pass parts of Obamacare in the first place. Due to conservative opposition, Congress failed to pass a budget for fiscal year 2017, creating an opportunity to pass two budgets, each with reconciliation possibilities, this year.

In the first budget, Congress should include the full repeal of Obamacare. This budget should pass the House and Senate easily and be placed on President Trump’s desk for his signature soon after he takes office. The next best option would be for Congress to take the reconciliation bill that repealed Obamacare, but was vetoed earlier last year (H.R. 3762), and pass it again with additional language repealing the Obamacare insurance mandates – a central reason health insurance premiums continue to rise. The third and minimal option would be for Congress to simply re-pass H.R. 3762, which does not include the repeal of insurance mandates and other important provisions. Repealing Obamacare does not mean that individuals on the federal and state Obamacare exchanges would immediately lose their health care plans. Instead they would have an ample period of time to transition back to an insurance plan on the individual market without losing coverage.

Congress should then pass the normal budget for fiscal year 2018 that lowers spending levels and includes other conservative priorities. This will give Congress time to work on an Obamacare replacement plan that restores consumer choice, strengthens the doctor-patient relationship and lowers costs. Replacement reforms Congress should consider include improving and expanding health savings accounts, removing government barriers that stop patients from participating in direct primary care arrangements, allowing patients to buy health insurance across state lines, and equalizing the tax treatment of health insurance for individuals and businesses, among others.

Obamacare Repeal Timeline Slipping: This January, Congress took an import first step to repeal Obamacare by passing the FY 2017 “shell” budget resolution (S. CON. RES. 3). Heritage Action key voted “Yes” on the resolution since it’s “the only way to expedite the repeal of Obamacare.” This resolution begins the process of budget reconciliation by setting up instructions for the House Ways & Means Committee, the House Energy & Commerce Committee, the Senate Finance Committee, and the Senate Health & Education & Labor & Pensions Committee to write a budget reconciliation bill that repeals Obamacare. Once the bills pass out of their respective committees they move to the Budget Committee. The Budget Committee then passes one unified repeal bill which the House and the Senate can then pass with a simple majority and President-elect Trump can sign into law.

Unfortunately, despite passing the budget resolution in early January, Congress has still not written the budget reconciliation bill repealing Obamacare. Seven in ten Americans believe the longer Congress waits, the less likely Obamacare repeal becomes a reality. Congress cannot allow the timeline to continue to slip. Not only does it delay work on other legislative priorities, but millions of Americans are suffering from the harmful side effects of Obamacare as premiums and deductibles continue to rise and health insurance choice falls.

Conclusion: Some repeal proponents assume Republicans must have a replacement plan at the same time as repeal, but this ensures momentum for full repeal stalls. Republicans may have a difficult time agreeing on any one single replacement plan, and Democrats will refuse to negotiate, instead doing everything in their power to sink the replacement plan and therefore Obamacare repeal.

Congress will use any excuse to avoid doing the right thing. As former Senator Jim DeMint and current President of the Heritage Foundation strongly wrote: “When I was in the Senate, they would use every excuse to avoid fighting for conservative priorities. “Wait until we get the House.” Done. “Wait until we get the Senate.” Done. “Wait until we get the White House.” Done and done. There are simply no alternatives left but to repeal Obamacare and win the fight (a shocking prospect for some!)”

Members who truly want to repeal Obamacare must insist on repeal immediately. This proposed two-step process gives Republicans the best chance to repeal Obamacare and honor their commitment to the American people who put them in power while providing plenty of time to enact a replacement plan. Conservatives must continue to urge their member of Congress write and pass the budget reconciliation bill to repeal Obamacare as soon as possible.

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Heritage Action Memo: How to Repeal All of Obamacare by Inauguration

[DOWNLOAD THE PDF]

To:            Interested Parties
From:       Heritage Action for America
Date:        December 5, 2016
Subject:   How to Repeal All of Obamacare by Inauguration

Republicans have promised voters a full repeal of Obamacare since 2010, when the health care law was first passed. In fact, since Republicans took control of the House in 2011, Congress voted over 60 times to repeal parts or all of the law. Republican congressional leadership and President-elect Donald Trump have all promised to repeal the law.  

There are no more excuses to be had. The Republican-controlled Congress has every tool that it needs to overcome any and all obstacles that stand in the way of fully repealing Obamacare. Now that voters have given Republicans control of the House, Senate, and the White House, this campaign promise can and must quickly become reality and the American people should hold them, and President-elect Trump, accountable for delivering on that promise.

In fact, it is entirely possible for the Republican Congress to have a bill fully repealing Obamacare on President-elect Trump’s desk by the time he takes office on January 20. This memo outlines the path that Congress can take over the next two months to ensure a bill repealing Obamacare is the first thing President Trump signs – and that he signs it on Inauguration Day.  

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Open letter re: Wall Street Journal’s recent editorial

Heritage Action has agreed and continues to agree with The Wall Street Journal’s editorial page on many of the important issues facing our nation. And The Heritage Foundation had a long and enduring relationship with late conservative icon Robert Bartley, who served as the editorial page editor for decades. Upon Bartley’s passing in 2003, then-Heritage Foundation President Edwin J. Feulner said “His commitment to the free society was extraordinary.” Today, however, the right faces new challenges that call for new solutions. Meeting those challenges will require resolving disagreements internal to the right as much as overcoming the challenges to the free society posed by the left. And on these debates, the Journal has consistently positioned itself against the forces advocating much-needed change.

One of the core challenges facing conservatives in the 21st Century is how to build upon rather than merely wax nostalgically for Ronald Reagan’s America. The unconventional politics of the right in 2016 have demonstrated that it was naively simplistic — and, as it turns out, politically tone deaf — to assume that the messages that proved successful in 1980 and 1984 would be received in the same manner decades later when the problems facing families and communities had changed.

In 2011, Heritage Action’s chief operating officer Tim Chapman and I began our own effort to sketch a vision of the future in an op-ed for Real Clear Politics explaining the challenges facing our nation. We argued the “corrupt nexus” of the Big Wall Street, Big Government, Big Labor, and Big Business — all of which are protected classes in the American political system — was “at the heart of the dissatisfaction across the country towards Washington.” So long as it was the party of Wall Street and K Street, we argued, the Republican Party would not be trusted by its own voters as agents of the change they demanded. A new approach was required if conservatism was to be advanced.

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