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 (H.R. 1628). Speaker Paul Ryan was forced to delay a vote on the AHCA before finally pulling it from the House floor due to lack of support among House Republicans – conservatives and moderates included. 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 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 premiums by as much as 68 percent. 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 regardless of their previous insurance history, which incentivizes potential customers to delay purchasing insurance until they need it. The guaranteed issue requirement necessitated the individual mandate in Obamacare, which has been replaced in the AHCA by the 30 percent 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extending existing protections in the employer market to the individual market once Obamacare’s regulations have been repealed to solve the “waiting until you are sick to get coverage” issue.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.
Moderate Republicans have hidden behind the flimsy argument that 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 and should maximize its use. Congress can address individuals priced out of the market with pre-existing conditions through alternative solutions such as state based high risk pools.
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 are pushing repeal past 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, including Title I regulations, campaigned and won on full repeal, and voted more than 60 times to repeal parts or all of the disastrous healthcare law. Congress can repeal Obamacare through modifications to the AHCA, through a new, more comprehensive rewrite, or 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.