Two key Senate Republicans introduced a proposal Monday that would let states choose whether to keep their existing health insurance marketplaces or forge ahead with a new, more conservative plan.
The proposal, from Sens. Bill Cassidy of Louisiana and Susan Collins of Maine, is the first Senate replacement plan proposed this year and takes a more moderate approach to repealing and replacing the 2010 health care law.
State legislatures would be able to choose, in 2018, whether to continue to support the insurance market and institutions put in place by former President Barack Obama’s law, or to opt into a new system with many of the same consumer protections but fewer regulations. Under the new system, insurance coverage would be much less comprehensive but likely would be cheaper.
The legislation attempts to insulate Republicans in Congress from some of the difficult choices associated with overhauling the entire health care law. The proposal wouldn’t fully repeal the law and would push many of the toughest decisions about coverage to the states. Its backers, including Sens. Shelley Moore Capito of West Virginia and Johnny Isakson of Georgia, are some of the Senate’s more moderate Republicans.
“California, New York — you love Obamacare, you can keep it. I disagree with it, but Republicans think power is best held at the state level, not by Washington D.C.,” Cassidy said. “On the other hand if you’re speaking to Maine and Louisiana, where premiums have been going up by double digits … then those states could opt for something different.”
The plan comes as Republicans in Congress continue to grapple with questions about just how much of the 2010 law they should repeal through the so-called reconciliation process, which allows them to bypass the Senate’s 60-vote threshold. Major questions about exactly how to replace the law still loom.
Cassidy said Senate Majority Leader Mitch McConnell, R-Ky., is “waiting to see how this kind of sorts out” before weighing in on specific proposals.
Cassidy also suggested that keeping the health care law as an option could help Senate leadership find the 60 votes it would need to pass a replacement bill through regular order. But the bill could be a hard sell for staunch conservatives because it wouldn’t fully repeal the controversial 2010 law. The plan would also keep in place, at least initially, many of the health care law’s revenue streams — like the unpopular Cadillac tax and the health insurance tax — to pay for its changes.
The bill has not been scored by the Congressional Budget Office, but it could cost as much as or more than the 2010 law. Collins said states that have not yet expanded Medicaid would still have the option to receive federal funding associated with that expansion.
The alternate option
The alternate plan from Cassidy and Collins would offer people who aren’t covered — through their jobs or through Medicare, Medicaid or the Department of Veterans Affairs — a catastrophic insurance plan that would be fully covered by their state. Its coverage would be minimal compared with the current health care law’s requirements, and it would come with high deductibles Republicans often decry.
To help offset those deductibles, the plan would offer many individuals a pre-funded health savings account to help minimize initial out-of-pocket costs. It wouldn’t cover every dollar up to the deductible, Cassidy conceded, but it would allow low-income families to start accessing health services they might not currently be able to afford, given their high deductibles.
The plan would also auto-enroll every eligible American. Cassidy and Collins said that would help cover even more people than are covered under the 2010 health care law, and could lower premiums by as much as 20 percent.
The bill may also be unnecessary. Under the 2010 law, states can already apply for so-called 1332 waivers that let them substantially overhaul the way they provide insurance, provided their new plans cover the same number of people for the same cost as the health care law.