DETAILS: Summary of Republican Study Committee’s alternative to Obamacare

The Republican Study Committee will roll out their alternative to Obamacare, the “American Health Care Reform Act,” on Wednesday. RSC Chairman Steve Scalise, RSC health care working group chairman Phil Roe, and other RSC members will unveil the new legislation at a Wednesday afternoon press conference. Below is a bill summary courtesy of the RSC.

Bill Summary 

Title I – Repeal of Obamacare

This legislation fully repeals the Patient Protection and Affordable Care Act and health care- related provisions in the Health Care and Education Reconciliation Act of 2010. 

Title II – Increasing Access to Portable, Affordable Health Insurance

This legislation will level the playing field between those who receive insurance from an employer and those purchasing it in the individual market. It does so by replacing 1) the current uncapped tax benefit for employer-sponsored health insurance and 2) the self-employed tax deduction with an above-the-line standard deduction for health insurance (SDHI). Those with a qualifying health plan will receive an SDHI of $7,500 (individuals) or $20,000 (families) which will apply to income and payroll taxes, and will increase at CPI-U. The SDHI eliminates the current incentive to choose increasingly expensive plans by providing the full value of the deduction regardless of how expensive the plan is. For example, a family with a $15,000 plan would receive an additional $5,000 tax deduction. Based upon Kaiser Family Foundation data, the vast majority of Americans will receive a tax cut under this plan.

This tax benefit will be portable, will provide payroll tax relief to the working poor, and will give families the flexibility to choose a plan that best fits their needs.

In addition, this bill will expand access to and allowable expenses for health savings accounts (HSAs), increase the maximum allowable contribution into HSAs, and allow employers to offer a larger benefit for successful completion of a wellness program than is currently permitted.

Title III – Improving Access to Insurance for Vulnerable Americans

This legislation will expand federal support for state high risk pools to $25 billion over 10 years, providing a federalist solution to address a segment of the population that has been unable to obtain affordable insurance. Premiums in these state high risk pools will be capped at 200% of the average premium in the state.

The bill also guarantees that individuals with pre-existing conditions can move between the large group, small group, and individual health insurance markets, so long as they maintain continuous coverage. Under current law, individuals purchasing insurance in the individualmarket are protected from pre-existing condition exclusions only if they have not had a substantial break in coverage, their previous coverage was through an employer, and they fully exhaust COBRA coverage. This provision would allow individuals to receive those same protections regardless of the source of their prior coverage and without requiring them to exhaust COBRA coverage, which is often very expensive for both employees and employers.