Senator Paul’s ObamaCare Replacement Plan

 

Another ObamaCare replacement plan is here. This time it is Kentucky Senator Rand Paul who is weighing in with his ideas on healthcare reform.

To be sure, Senator Paul is also Dr. Paul, an ophthalmologist. That gives him more than the average senator’s perspective on the needs in healthcare reform. He has just introduced The ObamaCare Replacement Act (S. 222), which he is pushing as a replacement plan to coincide with repeal of ObamaCare on the same day. This idea of repeal and replace simultaneously is gaining some traction since it is favored by President Trump.

The Paul Plan

Senator Paul’s plan has the following significant features:

  • Repeal and replacement on the same day
  • Pre-existing conditions – two year open enrollment period
    • Restore HIPAA pre-existing protections
  • Equalize tax treatment of health insurance
    • Universal deduction on income and payroll taxes regardless of where individual obtains health insurance
    • Preserves employer-provided coverage and tax exclusion
  • Expansion of HSA accounts
    • Tax credit up to $5000 for contributions to HSA
    • Unlimited annual contributions to HSA
    • Eliminate requirement to have high-deductible plan
    • Would enable those on Medicare, Tricare, HIS, and health care sharing ministries to establish HSAs.
    • Allows both prescription and OTC drug costs paid from HSA
    • Allow purchase of health insurance with HSA funds
    • Allow exercise and weight loss programs paid from HSA
    • Allow “concierge” and “direct practice” doctor fees paid from HSA
  • Charity care and bad debt deductions for physicians
    • Limited to 10% of physician’s gross income
  • Encourage sales of health insurance across state lines
  • Association Health Plans allow small businesses to pool together across state lines to lower expenses
  • Exemption from anti-trust laws for health care professionals to negotiate better health plan terms
  • Increase state flexibility in designing Medicaid plans
  • Protections for self insurance coverage by businesses

 

There is a lot to like in this plan. It preserves coverage of pre-existing conditions, levels the playing field for taxation of healthcare insurance, greatly expands HSAs and increases freedom of choice in purchasing insurance and designing Medicaid plans by each state.

But there are also many questions. The plan has not yet been scored by either the CBO or the H & E so we don’t know it’s impact on such things as coverage of the uninsured, the cost of plan premiums, access to healthcare (especially for the poor), the federal deficit and Medicaid reform. These are important questions that will greatly affect the political viability of the plan.

Senator Paul is a libertarian who believes in less government control and fiscally conservative budgeting. He has been critical of other plans that he believes will increase the federal deficit. Therefore, I would expect his plan to be designed to lower the federal deficit while limiting government control. I am anxious to see if neutral scoring of the plan achieves these two important goals. If he can achieve these goals while insuring at least as many people as ObamaCare, then he will have a plan worthy of serious consideration.

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