Alternatives to Obamacare (Part 1: What's in the Bill?)

Editor's Note:

      I completed this article at 5:15 P.M. CST on March 6^th, 2017. Unbeknownst to me, at 5:00 P.M. EST – 75 minutes earlier – the Washington Post published the below article, reporting that the House Republicans had gone public with what, until then, had been their secret plan. Although I did not publish it immediately, I concluded my essay at 5:15, and discovered the Washington Post article at 7:00 P.M. CST.

      At the time of publishing – 9:00 P.M. CST on March 3^rd – the Washington Post article displayed a publishing time of 7:17 P.M.; however, I first read the article around 7:15, when the article gave a publishing time of 5:00 P.M.

      I end this article by attempting to predict the contents of the once secret, now public House GOP health bill. See how you think I did.

                                                                                                                    - Joseph W. Kopsick
                                                                                                   9:00 P.M. CST, March 6^th, 2017
https://www.washingtonpost.com/powerpost/new-details-emerge-on-gop-plans-to-repeal-and-replace-obamacare/2017/03/06/04751e3e-028f-11e7-ad5b-d22680e18d10_story.html

Table of Contents

1. The Debate Over the Future of Obamacare

2. The State Lines Plan

3. No Plan to Replace?

4. The Cruz Health Care Choice Act

5. Rand Paul's Obamacare Replacement Act

6. Rand Paul and Health Savings Accounts

7. The Cassidy-Collins Plan

8. Other Republican Proposals

9. Who Might Be Behind the Secret G.O.P. Plan
10. What Might Be in the Secret G.O.P. Plan

11. Sources

Content

1. The Debate Over the Future of Obamacare

      The Patient Protection and Affordable Care Act (P.P.A.C.A., or simply A.C.A.) has failed to achieve its goal of getting the costs of health insurance under control.¹ Barack Obama's signature health legislation, also known as Obamacare, has increased regulations and bureaucracy that stifle job growth,^2,3 compounding the problem of affordability. Although more people are insured now than when Barack Obama took office,⁴ more than 7 million Americans lost their health care between 2009 and when the law rolled out in late 2013.^4,5 Some Americans believe that the election of the current president was largely the consequence of that law's failure.⁶

      On February 28^th, the night of Donald Trump's first address to a joint session of Congress, Senator Ted Cruz told PBS that Rand Paul's Senate “Obamacare Replacement Act” (and Mark Sanford's House plan, which mirrors it) were the only Obamacare repeal plans that Republicans were considering.⁷ But the next day, New York Magazine published an article about secret health talks.⁸ The article suggested that only Republicans were allowed to see the bill, and quipped that Ryan managed to stay true to his word about not meeting in a “back room” by meeting in a basement room instead.⁸

      The next day (March 2^nd), Democratic Senate Minority Leader Steny Hoyer of Maryland live-streamed video of himself searching for the bill, and for information about congressmen may obtain it and read it.⁹ Hoyer searched in the office of Congresswoman Cathy McMorris Rodgers (R-WA), which was a rumored location of the reading of the bill, but he was unable to find it.¹⁰

      Congressman Frank Pallone (D-NJ) searched for the bill in G.O.P. Senate Majority Leader Kevin McCarthy's office.¹¹ Congressman Paul Tonko (D-NY) reported being told he had the wrong room, and that nobody would give him the correct room.¹⁰ That day, the Huffington Post reported that “Energy and Commerce Committee Republicans were allowed to review the health care bill – or at least a portion of the text – but Democrats were shut out, as were other Republicans.”¹⁰ Additionally, Senate Democratic Leader Hoyer and Senate Republican Leader McCarthy debated on the floor of the Senate about the alleged secrecy of the bill.¹⁰

      Senator Rand Paul of Kentucky tweeted that another alternative had been proposed in the House, and that congressmen and members of the public are not allowed to read it.^{12, 13} Senator Paul, who wants to repeal and replace Obamacare on the same day,¹⁴ believes that House leadership wants to sneak-in a plan that would look like “Obamacare lite”.^{12, 13} According to Paul, this means less than full repeal, with “new entitlements and extending [M]edicaid expansion”¹².

      Whatever the plan is, it is hard not to be reminded of the way Obamacare was first pushed through: through back-room deals and procedural tricks.^{15, 16} For people of all political persuasions, whether they advocate full repeal or keeping the outgoing president's signature piece of legislation intact, the time to act on health policy is now, especially considering recent signals that the individual mandate is being weakened.¹⁷

2. The State Lines Plan

      Amid the transition from Barack Obama's administration to Donald Trump's, the fate of the Affordable Care Act (at least for the next four to eight years) may be sealed any day now. In his first address to Congress, the president called on the legislative body to “repeal and replace Obamacare with reforms that expand choice, increase access, lower costs, and at the same time provide better health care.”¹⁸ The day before the address, President Trump told a group of Republican governors that health care is “unbelievably complex”,¹⁹ saying “nobody knew healthcare was so complex.”²⁰ And it is.

      Due to presidential reorganization authority in health affairs having been ruled constitutional, and due to the federal government's authority to regulate interstate commerce, health insurance policy is popularly viewed as a federal issue. However, it is really an issue of balancing state and federal authority, and one of interstate commerce. It is additionally a debate about what the very words “federal” and “regulate” mean in the first place. This is why the ongoing debate over the future of national health policy will always involve the question of whether Washington, D.C. should play a role in keeping competition open in the states, or whether it should instead dictate the states' health policy to them.

      Today, states may only regulate small-group and individual policies.²¹ Health insurance customers in Lake County, Illinois can choose between multiple insurance carriers in the Obamacare market, but other places are not so lucky. There are five entire states where residents have only one resort, eight states where two choices exist everywhere you go, and 21 states that have areas where only two choices exist.²² This is arguably the result of requiring insurers to comply with Obamacare, setting up state-run “marketplaces”, and the fact that 45 states prohibit the purchase of individual and small-group health insurance policies from across state lines.²³ Under Obamacare, purchasing health insurance from other states is only legal if it complies with “consumer protections” which were implemented in 2014 to provide basic regulation of non-group and small-group insurance.²¹

      Although purchasing non-group and small-group insurance is only legal in five states, nine other states failed to pass similar legislation after Barack Obama took office.²³ If it were legal for Illinois residents to buy individual and small-group policies from other states, then residents who are out of work would have the freedom to buy health insurance from nearby Indiana, or from Wisconsin, with which our county shares a border. In fact, people in any state would be able to do that, and moreover buy insurance from any state, since Obamacare's online exchanges and private insurers allow people to buy policies online.

      The new president's support of what we will call for the sake of simplicity the “State Lines Plan” could achieve his goal of increasing affordability and choice in health insurance, by introducing competition in non-group and small-group insurance, and increasing the degree of state sovereignty over health, while also (perhaps perplexingly) decreasing state regulations.

3. No Plan to Replace?

      Since the A.C.A. became law in 2010, the law's supporters have insisted that “nobody has a plan to replace Obamacare”,²⁴ but in reality, they have every reason to let people believe that keeping the law (or segments of it) is the only option. They have routinely declined to admit that, since before Obamacare was even signed into law, Republicans and others have been suggesting alternatives and proposing replacements, such as the State Lines Plan.

      These repeated lies by the Democratic Party evidently proved frustrating to Americans who want a full, honest, and careful discussion about the road ahead on health insurance. So much so, evidently, that in 2010, Democratic political consultant Doug Schoen explained the Republicans' alternative to the American people. Schoen explained that Republicans want to make it legal to buy and sell health insurance plans across state lines, as long as the policies comply with state legislation concerning individual and small-group policies.^25-29 This aspect of the plan could help states regain some authority to regulate health insurance, a policy that would be more in keeping with what is said on the matter in the Enumerated Powers of the U.S. Constitution.³⁰ The plan has the potential of uniting the majority of conservatives, because it satisfies their desire for a platform that balances states' rights with free trade.

The idea of the proposal is to solve many states' problem of local insurance company monopolies on small-group and individual policies. The goal is to increase competition in the health insurance market, by fostering free flow of interstate commerce in insurance policies.³¹ Proponents hope that increasing consumer choice will increase affordability of premiums, and thus coverage.³² If successful, the proposal could also result in a wider variety of the types of health insurance policies which are available for purchase.

      The State Lines Plan is what now-President Donald Trump and Florida Senator Marco Rubio were arguing about when, at a G.O.P. presidential candidates' debate in Texas on February 25^th, 2016, they repeatedly referred to “getting rid of the lines around the states”.³³ At that debate, Trump said the plan would “increase competition”, and claimed that the plan was almost put into place. He has stated elsewhere that he believes competition will fix the current system of state-operated insurance markets, which he says “gives the insurance companies essentially monopolies”.³⁴ When Rubio asked Trump, “What is your plan?”, suggesting that Trump didn't have a plan on health policy, Trump's response was that getting rid of the state lines would allow us to “have many different plans”.³³

4. The Cruz Health Care Choice Act

      Both Trump and Rubio favor legalizing the interstate insurance trade, and so does Senator Ted Cruz of Texas.³⁵ On March 3^rd, 2015, Cruz unveiled his “Health Care Choice Act”, which would allow interstate purchase of health insurance policies, and repeal Title 1 of Obamacare, abolishing the individual mandate, subsidies, and state insurance marketplaces.³⁶ The bill has not been re-introduced in the 115^th Congress.

      At a January 2016 presidential debate in Iowa - the debate from which Donald Trump was notably absent - Senator Cruz voiced his support for “repealing every word of Obamacare”.³⁷ He endorsed the State Lines Plan, saying that it would help make insurance “portable”, and that it would “create a true, fifty-state national marketplace, which will drive down the cost of low-cost catastrophic … insurance”.³⁸ Cruz additionally suggested “de-linking” “insurance from employment, so if you lose your job, your … insurance goes with you”.³⁸ Cruz also said he hoped to empower patients, keep government from getting between patients and doctors, and expand Health Savings Accounts.³⁷

      Senator Cruz wants to address the tax exclusion for employer-sponsored health insurance,³⁸ observing that it unduly inconveniences people who have to pay taxes on their insurance. They pay these taxes because they buy their insurance through non-employer avenues, such as individual and small-group plans.^{35, 39} This issue went unsolved for the eight years of Barack Obama's presidency, and Obamacare was supposed to address the issue of unemployed people struggling to get coverage, not allow it to get worse. It seems appropriate to deduce that this tax credit was likely the result of a flawed perception that you can cause more people to have jobs just by giving tax credits to businesses for sponsoring employees' health insurance; there is no evidence that that is the case.

      Cruz believes that integrating this “de-coupling”⁴⁰ or “de-linking” insurance and employers idea into the State Lines Plan will help make insurance just as accessible and affordable, regardless of location and employment status.³⁵ That way, if a person loses their job, or has to relocate to another state, or both, or gets a job in a new state, they can have many choices that are equally affordable, without the influence of government manipulation of prices through the employer-provided health insurance tax credit.

      “De-linking insurance from employment” could be accomplished either by approaching it as a tax loophole issue, or an issue of whether to tax health insurance to begin with. The secret Republican plan to replace Obamacare could involve beginning to tax “more generous employer-sponsored health insurance plans, which are now tax-exempt”.⁴¹ This would close the loophole; however, the loophole could also be closed through repealing taxes on non-employer-provided health insurance.

      Although Cruz has not explicitly proposed repealing non-employer insurance taxes, he has stated that he wants to keep contributions to Health Savings Accounts “pre-tax”, meaning exempt from federal taxation. Continuing to exempt the unemployed and people who are moving from health insurance taxes (in addition to exempting them from the individual purchase mandate) will help make it easier and more affordable for them to make contributions to Health Savings Accounts.³⁹

      Either the State Lines Plan, or Senator Cruz's augmentation of it, would help establish a genuine interstate market in the trade of insurance. This would increase competition and choices, thus lowering premiums, increasing affordability and coverage, and at the same time providing tax relief and shrinking government. Still, taken as a whole, Cruz's health policy would be a viable alternative to Obamacare, and it would be one that uses market solutions and limited state sovereignty in the policy sphere of health, rather than government mandates and a tax code that discriminates against people whose employers do not provide them with health insurance.

      Cruz has not yet formally introduced a health bill in the 115^th Congress. However, on January 5^th of this year, Congresswoman Marsha Blackburn (R-TN), who sponsored Cruz's 2015 bill,⁴² introduced the identically-named Health Care Choice Act of 2017 (House Resolution 314). That bill would repeal the individual and employer insurance purchase mandates, and legalize interstate insurance purchase.⁴³ Although this is identical Cruz's position (save for de-linking insurance from employment), it is unclear whether Cruz is currently involved in the drafting of Senate legislation which would mirror Blackburn's.

      It's possible that Cruz has declined to propose a Senate bill out of a desire to unite support behind a plan that Kentucky Senator Rand Paul wrote with South Carolina Congressman Mark Sanford.⁷ On January 27^th, Blackburn introduced another health bill in the House; the Health Care Choices for Seniors Act.⁴⁴ It's possible that, having worked with Cruz, Blackburn supports Paul's plan as well; after all, Blackburn's House bill isn't competing with Paul's Senate bill. It could be beneficial for Paul, Sanford, Cruz, and Blackburn to strengthen their solidarity with one another, in order to begin building a coalition that opposes both Obamacare and the secret Republican agenda.

5. Rand Paul's Obamacare Replacement Act

      Like President Trump,¹⁸ Senator Rand Paul favors repealing the entirety of Obamacare.⁴⁵ Of course, they and most other Republicans (Senator Susan Collins of Maine included⁴⁶) do not favor “replacing it with nothing”, despite what some have claimed.²⁰ On January 2^nd of this year, Senator Paul suggested replacing Obamacare with “freedom”⁴⁷, and replacing it immediately. Paul favors repealing not only the individual and employer mandate, but also the guaranteed issue regulation and the community rating regulation.⁴⁸

      In an op-ed from the day before the 115^th Congress was sworn in, Paul called for the basic freedom “to choose inexpensive insurance free from government dictates”, and the freedom “to buy insurance across state lines”.⁴⁷ Agreeing with Ted Cruz³⁷, he called for freedom “to save unlimited amounts in a health savings account”⁴⁷. Most importantly, he said individuals should have the freedom “to join together in voluntary associations to gain the leverage of being part of a large insurance pool”. ⁴⁷

      Senator Paul would accept it being legal to deny coverage on the basis of pre-existing conditions.⁴⁹ After all, sick people primarily need care, not insurance, and you can't insure against something that has already happened. However, Paul does not want to see people thrown off their insurance when and if Obamacare is repealed; instead, he wants to ensure a two-year period of uninterrupted coverage for policy holders with pre-existing conditions;⁵⁰ “a two-year window for people with preexisting conditions to sign up for care.”⁵¹ Senator Paul is concerned that requiring insurance companies to issue policies to people with pre-existing conditions could cause "adverse selection" of insurance policies, which he fears could bankrupt the health insurance industry.⁵² That's why on January 24^th, 2017, he introduced the Obamacare Replacement Act (Senate Bill 222).^{50, 53}

      The Obamacare Replacement Act would allow people who work in similar professions, and groups of businesses that share common interests, to pool their money and resources together, through Association Health Plans (AHPs), in order to inexpensively purchase group health insurance policies.^{54, 55} This aspect of Paul's proposal could potentially help professional associations demand insurance policies that are customized so as to cover the unique and distinct health risks associated with particular industries and types of workplaces.

      The explicit purpose of allowing people to “join together in voluntary associations” is, as Paul’s press release stated, “to gain the leverage of being part of a large insurance pool”.⁵⁰ The idea is to help policy holders gain collective buying power;⁵⁶ in order to match, equalize, and balance-out insurance companies’ great selling power. When customers’ buying power increases, insurance companies’ power to set high prices declines in comparison.⁵⁷ As a result, premiums decrease, helping working people afford coverage, leading to more people being insured.

      The Obamacare Replacement Act, which Rand Paul authored with South Carolina Congressman Mark Sanford in the House (introducing the bill as H.R. 1072 on February 15th⁵⁸), intends to put to good use the natural market incentive which people have to join into large insurance pools in as numerous quantities as possible. The fact that this incentive exists, renders the idea of an individual purchase mandate completely unnecessary.

      That's because the group insurance provision of Paul's proposal directly addresses the concerns of opponents of the “state lines” plan. These critics say Paul's plan would fail because it would reduce the size of risk pools, thus reducing individuals' and small groups' leverage, and failing to give insurance companies any reason to expand their networks and begin to offer coverage in other states.^{59, 60} It's entirely possible that some insurance companies don't want to expand into other states because: 1) so few states would allow them to, 2) companies don't want to issue Obamacare-compatible policies, and / or 3) it could take a long time to build networks in new states, and an interstate network. But with a new and more rational health policy, and a little bit of determination to get more states on-board with the plan, building such networks would have effects on affordability and accessibility that would be well worth the effort.

      With a fully repealed individual insurance purchase mandate, state-run “public options” would be truly optional. Public options could potentially even compete in a truly free, open market in health insurance, alongside cooperative and public plans⁶¹ (although Senator Paul has not specifically proposed this). Paul's plan and Cruz's plan each offer tax relief and tax fairness. That's why either the Paul-Sanford Obamacare Replacement Act or a new Cruz Health Care Choice Act for the 115^th Congress, would represent meaningful steps towards providing tax relief for people struggling with medical expenses, and establishing free trade of health insurance with perfect competition,⁶² while affording consumers as many choices as possible.

6. Rand Paul and Health Savings Accounts

     Like Ted Cruz, Rand Paul wants to eliminate contribution limits for Health Savings Accounts (H.S.A.s). Senators Cruz and Paul want all Americans to be free to save unlimited amounts of money in H.S.A.s, without paying taxes on those contributions.⁶¹ Health Savings Accounts allow people to save money, tax-free, in order to pay for expenses that health insurance doesn't cover; namely, co-pays and deductibles.⁶¹

      Senator Paul also favors passing tax credits for insurance premiums,⁴⁸ as well as an optional credit of up to $5,000 for contributions to H.S.A.s.⁴⁸ However, not all congressional Republicans support tax credits. On March 3^rd, Representative Raul Labrador (R-ID) told CNN that he considers tax credits for H.S.A. contributions the same thing as the Obamacare subsidies which 7.5 million Americans currently receive.³⁶ However, Congressman Labrador was talking about refundable tax credits, while Senator Paul was referring to ending the refundability of those tax credits.

      A Libertarian might argue that subsidies and tax credits are only the same thing if it is fair assume that government may tax us out of as much of our property and money as it pleases. After all, once you've already stolen someone's money, it's hard to know whether what you're doing with it is right.

Paul's $5,000 H.S.A. tax credit only applies to the extent that a person is liable for five thousand dollars in taxes.⁴⁸ Critics of Paul's plan argue that limited tax credits would only benefit the wealthy.⁴¹ On March 3^rd, The Hill reported that a secret Republican plan may involve “means-tested tax credits”;⁶³ measures to exclude the rich from receiving tax credits for H.S.A. contributions.⁴¹

      One solution to all this could be to take some inspiration from the Negative Income Tax⁷² and the Earned Income Tax Credit,⁷³ and continue to apply those H.S.A. tax credits – in a way that's refundable - to people with tax liabilities below $5,000. However, that solution is precisely what Senator Paul views as the problem. That's because of debate over what is a tax credit versus what is a subsidy, and because some believe that people who have no income tax or payroll tax obligations should not be given “refunds” because they didn't earn anything to begin with.⁴⁸ In 2015, author John C. Goodman described Marco Rubio's tax credit plans as a “financial mandate”.⁷⁴

      On February 9^th, Christopher Jacobs, writing for TheFederalist.com, criticized Senator's plan in an article entitled “3 Key Problems with Rand Paul's Obamacare Replacement Act.”⁴⁸ Jacobs asserted that, rather than deal with the uncapped tax exclusion for employer-provided health insurance that already exists, Paul chose to instead create two new uncapped tax incentives, by providing tax credits for health insurance premiums and H.S.A. contributions.⁴⁸

      Jacob argues that Paul's H.S.A. plan creates a new federal subsidy;⁴⁸ essentially, that Paul has created the same kind of “new entitlement” he feared would result from the secret Republican health plan (Paul was referring to extending the expansion of Medicaid). Jacobs also worries that these proposed tax credits could be a slippery slope to a “major spending package in the form of tax credits”.⁴⁸ Additionally, Jacobs wrote that Paul's bill would keep Obamacare's “new entitlement” in the form of subsidies resulting from “the massive Medicaid expansion to the able-bodied”, which he says Paul's plan would keep Obamacare taxes in place in order to fund.⁴⁸

7. The Cassidy-Collins Plan

      Rand Paul and Ted Cruz are not the only lawmakers who want to expand Health Savings Accounts. Utah Senator and President Pro-Tempore of the Senate Orrin Hatch proposed the Health Savings Act,⁶⁴ whose identically-named mirrors in the House are sponsored by Michael Burgess⁶⁵ and Erik Paulsen.⁶⁶ Senator Jeff Flake⁶⁷ and Congressman Dave Brat⁶⁸ are sponsoring the Health Savings Account Expansion Act.

      The Patient Freedom Act of 2017, which would also expand H.S.A.s,⁴⁶ is sponsored by Senators Susan Collins of Maine, Bill Cassidy of Louisiana, Shelley Moore Capito of West Virginia, and Johnny Isakson of Georgia. The bill, referred to as the Cassidy-Collins plan or the P.F.A. for short, was introduced on January 23^rd.^{69, 70} That day, Senator Collins expressed her desire to repeal and replace Obamacare as soon as possible, and said that the intent of her bill is to prevent “needless and avoidable gaps in coverage”.⁷¹

      According to Susan Collins's Senate website, the bill (Senate Bill 191⁶⁹) would repeal the individual and employer mandate as well as benefit mandates, while addressing the causes of high health costs for young people and the way insurance plans are categorized. The P.F.A. also intends to empower states by allowing them to design their own plans, or to keep the Obamacare mandates by reinstating Title 1. The bill would also keep some of the A.C.A.'s consumer protections in place, such as the provision that prohibits exclusion on the basis of pre-existing conditions.⁷¹

      In addition to the basic State Lines Plan (perhaps best represented by the Blackburn bill), the Paul-Sanford Obamacare Replacement Act, and the Cassidy-Collins Patient Freedom Act, there are literally dozens of Republican alternatives to keeping Obamacare in place that are currently being considered. There are plenty of proposed alternatives to Obamacare, replacements for Obamacare, and plans to repeal and replace on the same day.

8. Other Republican Proposals

      On March 1^st, U.S. Representative from Texas Pete Sessions (not to be confused with newly confirmed Attorney General Jeff Sessions, the former senator from Alabama) introduced House Resolution 1275.⁷⁵ The bill's stated goal is to expand, beyond Obamacare, the “choices in obtaining and financing affordable health insurance coverage”.⁷⁵ H.R. 1275 intends to achieve this goal through eliminating the individual and employer insurance purchase mandates.⁷⁵

      The Blackburn plan and the Cassidy-Collins plan address the concern articulated in the Sessions bill,^{46, 76} so it could be argued that those two plans go further. However, the simplicity of the Sessions plan is straight-forward, and not being weighed-down by too many riders, amendments, and frills could give it an advantage when it comes to attracting support.

      Other health bills proposed during this Congress include a bill by Kristi Noem to repeal Obamacare's annual fee on health insurance providers,⁷⁷ and another bill that aims to achieve tax-free health insurance.⁷⁴ Other proposals include a Middle Class Health Benefits Repeal Act,⁸⁰ at least two bills concerning state health coverage flexibility,^{81, 82} and bills advocating reform^{83, 84} and increased competition,⁸⁴ access,⁸⁵ affordability,⁸⁶ and opportunity.⁸⁷ Yet other bills propose enhancing the health care safety net,⁸⁸ guaranteeing coverage for pre-existing conditions,⁸⁹ sustaining employee health benefits,⁹⁰ many bills concerning women's health,⁹¹ and other proposals.

      To repeat, there are more health bills (on both sides of the aisle) that are up for consideration this Congress; so many that it would take days to name and summarize them all. With all of these bills, and and considering that there are dozens of issues within health policy to contend with - there is no limit to the number of combinations of health policies that could be created. Especially if we look at legislation proposed in past congresses, such as the “freedom option” for which former Texas Senator Phil Gramm advocated in 2015.^{92, 93} But unfortunately, looking at past health bills just might result in a perfect storm of bad health legislation. That brings us to the secret Republican plan leaked March 2^nd.⁹⁴

9. Who Might Be Behind the Secret G.O.P. Plan

      Since Barack Obama took office in 2009, now Speaker of the House Paul Ryan has worked on health policy with the likes of California Representative Devin Nunes, Oklahoma Senator Tom Coburn, and North Carolina Senator Richard Burr.^{95, 96} Ryan also worked with Michigan Representative Fred Upton and former Minnesota Representative John Kline;^97-100 on a plan that aimed to “protect people with existing conditions”. The plan would have allowed states to opt-out of the Obamacare mandates, implement the State Lines Plan, allow children to stay on their parents' plans until they're 26, and enact tort reform, among other measures.¹⁰¹

      Ryan, Kline, and Upton were all involved in a 2015 working group that was organized by the Republican Policy Committee and Senator John Barrasso of Wyoming.¹⁰² That working group also included Senator Orrin Hatch of Utah and Senator Lamar Alexander of Tennessee.¹⁰³ Hatch, Alexander, and Barrasso on potential outcomes of the 2015 Supreme Court health case King v. Burwell, which dealt with subsidies under federal and state exchanges.⁶³ The three congressmen also proposed repealing the individual mandate,¹⁰⁴ and proposed providing financial assistance to “help Americans keep the coverage they picked for a transitional period”, and giving states “freedom and flexibility” to create insurance markets with more competition and choices.⁶³

      Recently, Senator Ben Sasse of Nebraska has been working with Senators Hatch and Barrasso on health, and according to Hatch, Sasse has been providing good ideas. Sasse says he opposes “fixing” Obamacare, and instead wants immediate repeal, although he also says it's not necessary to have a replacement ready for the day of repeal. Sasse has proposed a 1-½-year period of coverage for people with pre-existing conditions,¹⁰⁵ which is similar to Rand Paul's proposed two-year period.⁵⁰ Lamar Alexander says that he and his colleagues won't release their plan until President Trump comes out with his.¹⁰⁵

      On February 9^th, New York Magazine published an article characterizing Utah Senator Mike Lee's desire to focus on repealing Obamacare as a tacit admission that what will replace it could be unpopular.¹⁰⁶ On March 3^rd, Senator Kevin Brady (R-TX) said that there was not yet a final health bill, and that they would keep working with the Congressional Budget Office before presenting anything.¹⁰

It seems fair to conclude that the main people behind the secret Republican health plan are (most likely): Paul Ryan,¹⁶ Kevin McCarthy,¹⁰ Orrin Hatch, Lamar Alexander, John Barrasso, Ben Sasse, and Greg Walden of Oregon.¹⁰ Other possible contributors could include Kevin Brady,¹⁰ Mike Lee,¹⁰⁶ Tom Coburn, and Richard Burr in the Senate; and Fred Upton, Devin Nunes,^{70, 95} Michael Burgess⁶⁵, Erik Paulsen⁶⁶, and Chris Collins¹⁰ in the House of Representatives.

      We might be able to take some educated guesses at who's involved in putting the bill together. But is it possble that we may infer, from that information, what might be in the bill?

10. What Might Be in the Secret G.O.P. Bill

      On Monday, March 6^th, C.N.N. reported that “two key committees are expected to markup the proposal” to repeal Obamacare “starting as early as Wednesday” March 8^th. C.N.N. Described the bill as an “Obamacare repeal bill that includes some replacement components”.¹⁰⁷

      Despite the presence of all the alternatives enumerated above, it seems that the secret Republican plan is the one that is most likely to be passed. Although we don't yet know for sure what's in it – as sad as those two facts are to admit – there is hope. That's because we can infer that if a proposal has been rumored to be included in the new Republican health plan since the new Congress was sworn in, and it does not appear in other proposed bills, then it's probably safe to conclude that it will be in the secret G.O.P. plan.

      On March 2^nd, Rand Paul tweeted his concern that the plan would rename and keep parts of Obamacare.¹² It seems likely that some of Obamacare will be left in place, given that Paul Ryan¹⁰¹ and Ben Sasse¹⁰⁵ both want to protect people with pre-existing conditions. The Cassidy-Collins plan would leave the same parts of the law in place.⁷¹ It's unclear whether the Cassidy-Collins plan or the secret G.O.P. plan would keep Obamacare in name, but it's probably fair to conclude that the pre-existing conditions provision will be part of the secret plan.

      Both Ben Sasse¹⁰⁵ and Mike Lee¹⁰⁶ support focusing on repealing Obamacare, and would appear to accept not having a replacement for the A.C.A. ready on the same day. This position sticks out because the Cassidy-Collins plan⁴⁷ and Rand Paul's plan⁶⁹ both advocate repealing immediately and replacing either “now”, “as soon as possible” or on the same day. Ambivalence on this point is unique to Sasse and Lee, which means the secret plan might repeal Obamacare without being ready to replace it.

      John Barrasso,⁹² Paul Ryan,¹⁰¹ and Fred Upton¹⁰¹ – as well as Lindsey Graham⁹² – have all supported allowing states to opt-out of Obamacare's individual and employer insurance purchase mandates. The Cassidy-Collins plan does this too,⁷⁵ but it also allows states to design their own plans, and even lets them reinstate the mandates on the state level. So it's possible that the Cassidy-Collins plan is different enough from the secret G.O.P. plan that the secret plan's sponsors might prefer to end the mandates, but allowing states to self-direct.

      Paul Ryan¹⁰¹ and Fred Upton¹⁰¹ have favored the State Lines Plan in the past, and there may be a plan in the works to start taxing employer-provided health insurance.⁴¹ This, again, closes the loophole which is an obstacle to “de-linking” or “de-coupling” health insurance from employment, and but it closes the loophole by enacting a tax on employer insurance, not by repealing nor cutting taxes on small-group and non-group insurance. Of course, no one in Congress has proposed exactly that, and they'd be crazy to think such a bill would pass.

      That's why if any Republican lawmakers decide to push the State Lines Plan, it will probably happen only as long as employer insurance is taxed. Even if the State Lines Plan isn't included, employer insurance will probably be taxed. As in the example of states reinstating the Obamacare mandates and self-directing on health policy, the national Republican establishment has little reason to let the states experiment. The only alternative to avoiding the taxation of employer insurance is to satisfactorily address the issues of subsidies and tax credits.

      Orrin Hatch,⁶³ Fred Upton,⁶³ and others in the G.O.P.⁴¹ favor cutting off the wealthy from tax credits to people seeking health insurance by implementing means-testing.⁶³ Hatch, along with Congressmen Michael Burgess and Erik Paulsen,^64-66 also supports reform to Health Savings Accounts,^64-66 as do Rand Paul and Ted Cruz.⁴¹ Means-testing tax credits could be a way to reduce the cost of the plan, but it's also possible that the bill's designers don't care about transparency or cost. Republicans probably wouldn't consider means-testing tax credits but keeping them refundable, but then again, considering Paul Ryan's interest in the Earned Income Tax Credit and the Negative Income Tax¹⁰⁸, and given how unpredictable politics have been lately, there's an outside chance that Ryan could suggest this “progressive-conservative” proposal. But realistically, Republicans will probably make tax credits non-refundable, while also means-testing them, or if not both, then one or the other.

When it comes to Medicaid, Christopher Jacobs of TheFederalist.com characterizes the G.O.P. as being confused about whether to pursue reform or expansion.⁴⁸ In 2011, John Barrasso and Lindsey Graham – both still sitting senators – supported expanding Medicaid.⁹² Today, some Republicans support phasing-out the expansion of Medicaid.⁴¹ Rand Paul, for example, opposes extending Medicaid expansion.⁴⁸ With entitlements hawk Paul Ryan at the helm – if he is, indeed, at the helm of the secret plan – reform is the more likely outcome.

      It's possible that block-granting Medicaid to the states could prove a popular and pragmatic option. After all, both the President and the Speaker of the House supported block-grants in years past.¹⁰⁹ The case can be made that block-grants would satisfy conservatives by helping to re-establish constitutional health policy, and that the plan avoids a contentious battle over Medicaid at the federal level. However, it can also be argued that block-grants “kick the problem to the states”, getting Congress off the hook for solving the problem. But on the other hand, this issue was supposed to be solved by the states in the first place. Thus, it seems safe to say that block-grants will probably appear in the secret bill.

      Other measures which could possibly make their way into the bill include: 1) allowing young adults to stay on their parents' health insurance plans until they reach the age of 26, 2) enact medical malpractice reform (that is, limit the amount of money juries can award for non-physical damages), 3) prohibit insurers from imposing lifetime limits on benefits, and 4) guarantee renewability for people already enrolled in a plan. Both Speaker Ryan and Congressman Upton supported each of these measures two years ago.¹⁰¹

      On March 2^nd, Speaker Ryan said that the bill he was working on was inspired by a 2015 health plan proposed by then Georgia Senator Tom Price.⁹ Ryan added that Trump, the House, and the Senate were “in sync” about repealing and replacing Obamacare.⁹ Price, who now serves as the Secretary of Health and Human Services under President Trump, introduced the Empowering Patients First Act of 2015. The bill which would have repealed Obamacare, increased H.S.A. contribution limits, expanded tax-deductible contributions, allowed H.S.A.s to “pay some primary care fees”, and provided grants to states for high-risk pools.¹¹⁰

      Given Ryan's admission that Price influenced him, it seems fair to say that what is likely to end up in the secret bill is whatever President Trump and Secretary Price would accept. That's why it would be worthwhile to run through what the president wants on health. During a debate, Senator Marco Rubio accused Trump of supporting the individual mandate, a claim which Trump denied, advocating repealing Obamacare and replacing it with “something much better”.¹¹¹ Trump also said health insurance companies and drug companies are making a fortune off of the American people, and that premiums and drug prices should go down.¹¹² It's additionally worth noting that the health plan which Trump promoted in early 2016 had seven provisions: 1) completely repeal Obamacare, 2) legalize interstate insurance purchase, 3) allow people to deduct premium payments from their taxes, 4) make H.S.A.s tax-free, 5) demand price transparency from hospitals and insurers, 6) let the states handle Medicaid, and 7) make it easier to import drugs from overseas.¹¹³

      In summary, Republicans working in secret probably want to focus on repealing Obamacare, without any sense of full repeal or repealing and replacing immediately being the goals. They'll probably repeal the majority of Obamacare, while leaving in place a few “consumer protections”; probably the pre-existing conditions provision, but maybe the 26-year-olds provision instead. If they keep the 26-year-olds provision, then they will probably repeal the requirement to issue health insurance to people with pre-existing conditions, and instead support a plan to provide a one- or two-year transition period for such people to get insured. Whatever the case, these Republicans seem willing to accept letting Obamacare stay in place; at least in part, in name, and in the form of the pre-existing and / or 26-year-olds provisions.

      On the issue of the states, lawmakers behind the secret G.O.P. health plan will most likely allow states to choose whether to opt-out of Obamacare Title 1 and its individual and employer insurance purchase mandates. Although this provision may sound good, its inclusion in the final bill will almost certainly mean that allowing states developing their own health plans – and maybe even enacting the State Lines Plan as well – could be off the table. Establishment Republicans might be concerned that these two ideas could empower states and undermine federal authority; they won't tolerate either proposal without getting something back. That's why only one of the following measures – 1) tax employer insurance, 2) enact State Lines Plan, and 3) let states self-direct – will be on the final bill.

      If the State Lines Plan passes and the states can self-direct, then it probably means serious financial reform has taken place elsewhere. The secret plan will probably include either means-testing tax credits, ending their refundability, or both. The more likely that these lawmakers are to choose both, the more likely they will be to support measures that promote state direction, and the more likely they'll be to decline to start taxing employer-sponsored insurance. On one final state issue, Republican lawmakers working in secret will probably choose to block-grant Medicaid to the states, in order to avoid yet another expensive, protracted partisan battle.

      Additionally, the bill will probably expand Health Savings Accounts in at least two significant ways, and there's a possibility it could include tort reform. There's an outside chance that the individual mandate could be kept in place, while staying “optional” (really, only appearing to stay optional) due to the presence of tax incentives.

      Finally, there will almost certainly be no serious drug pricing or drug patent reform. Although the president thinks prices should be lower, these issues don't attract as much attention as issues like Medicaid, the State Lines Plan, Health Savings Account reform, or what to do about the two most popular provisions of Obamacare. Most likely, measures to address drug prices and patents won't make it into the final bill, unless they're provisions to either make it easier to import drugs or provide price transparency.

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Portions of Section 1 and 5 Written and Edited

on February 10^th, 16^th, and 18^th through 21^st, 2017

Full Text Written on February 23^rd and 27^th,
and March 2^nd through 6^th, 2017

Edited March 14th, 2017