Capitol Hill conservatives rallied behind the bill sponsored by Sen. Rand Paul (R.-Ky.) to replace the 2010 Patient Protection and Affordable Care Act, Obamacare, with a patient-centered federal policy at a Wednesday press conference at the Capitol.
“This is a big, big day for conservative Republicans,” said Paul, who was flanked by members of the House Freedom Caucus.
The senator, who has been a physician and eye surgeon for more than two decades, said that for the last six years, Republicans have promised voters that they would repeal and replace Obamacare.
In 2010, Republicans won the House of Representatives; and in 2014, Republicans won the Senate; and in 2016, Republicans won the White House–all based on that promise to unwind President Barack Obama’s landmark health care reform legislation, he said. “We owe this to the conservatives across the country to repeal–to completely repeal Obamacare.”
Former South Carolina governor Rep. Mark Sanford (R.-S.C.) said he was proud to offer the House companion bill to the 180-page Obamacare replacement bill written by Paul.
“I have long admired his stance toward liberty and individual freedom, and to maximizing both,” Sanford said. “I particularly like the way he’s taken his real life experience as a physician and applied them to bring liberty to ultimately patients and citizens alike across this country in terms of what comes next in health care.”
Paul said it is true that there are problems caused by Obamacare, but there were real problems in the healthcare industry before Obamacare that still need to be addressed.
“We are concerned about how to provide the most insurance at the least amount of cost, and that is what our replacement bill does,” he said.
For Paul the three top improvements in the bill are that it legalizes the sale of inexpensive insurance, expands the Health Savings Accounts which allow individuals to set aside money in tax-protected accounts for medical expenses, and allows Americans to band together in health insurance associations to create large pools of buyers for the purposes of driving down costs, he said.
The 11 million people buying insurance in the individual markets would be empowered with the opportunity to join one of these associations, he said.
Chairman of the House Freedom Caucus Rep. Mark Meadows (R.-N.C.) told reporters that the HFC fully supports the Paul-Sanford bill along with immediate repeal along the same lines as the 2015 Obamacare repeal bill that passed the House and Senate in 2015.
Meadows said that the 2015 repeal, which was completed through the same budget reconciliation process the current repeal is now going through — along with the Paul-Sanford bill with its two-year transition period — will bring about the repeal and replace of Obamacare, freeing Congress to tackle other projects and problems.
Because the repeal bill is part of the fiscal year 2017 budget, Congress cannot begin work on the fiscal year 2018 budget with 2017 unresolved, he said.
“It would be our preference to have a vote on this replacement within days of our repeal vote,” he said.
In January, while Obama was still in office, both houses of Congress voted to begin the repeal process with the next step of having relevant committees produce pieces of each chamber’s version. Bills using the budget track are privileged and do not need a 60-vote majority to end debate. Republicans hold a 52-to-48 majority in the Senate, making it unlikely to pass repeal through the regular order track.
The disadvantage to the budget track is that it is restricted to the taxes, penalties, and subsidies in the PPACA legislation. This means there are going to be three steps to unwind Obamacare. After repealing the financial underpinnings of the legislation, Congress would still need to address the rules, regulations, and administrative infrastructure left untouched by the budget bill. Finally, Congress needs to decide if there will be a replacement program or will it just allow the healthcare system into freefall.
Meadows said that another replacement proposed by Sen. Bill Cassidy (R.-La.) and Sen. Susan Collins (R.-Maine) is not a serious replacement because it leaves too much of the PPACA intact.
The North Carolina congressman said he welcomes all bills and all ideas, but Capitol Hill conservatives cannot support Cassidy-Collins.
“The speculation on what a replacement will look like has created an unnecessary climate of anxiety in this discussion,” he said. “I commend Senator Paul and Representative Sanford for releasing a plan so that we can move toward debating the issues at hand and ultimately keeping our promises to the people.”
The former HFC Rep. Jim Jordan (R.-Ohio) said he is not worried about the political backlash from repealing Obamacare, because Republicans campaigned against it for the last three election cycles and won.
Americans expect Republicans to repeal Obamacare, he said. “Everything they were told about this law turned out to be false.”
The House Freedom Caucus has two official positions on Obamacare, he said. The first is what is in process now, the repeal through the budget reconciliation track, just as Congress passed it in 2015. Second, pass a replacement bill that empowers patients and doctors — not Washington.
Sanford said the Affordable Care Act was well-intended, but it created some of its own problems.
“It had the government deciding what was essential, whether you or your family members thought the same,” he said. “It had the government setting up non-insurance insurance, which worked against all the math.”
A major fault in the Obamacare legislation is its failure to decouple health insurance from employment, he said. This coupling is a legacy of the wage and price controls from World War II, which were then codified in 1948.
During the war, employers were under pressure to pay higher wages for workers without pushing the workers into a higher tax bracket nor violating wage caps. Kaiser Shipyards, which built the Liberty Ships, got around these hurdles by offering subsidized health insurance, which functioned as tax-free income for the workers. Kaiser Permanente is a direct descendent of this innovation, which along with the Health Maintenance Organization, or HMO, became the routine practice in America.
The problem with this model, which Congress encouraged with tax deductions for company-based health plans, was that when a worker changed jobs, they changed insurance companies, and if the worker had a pre-existing condition, they either were locked into their current job or had to go without coverage for the pre-existing condition at the new job and its plan.
Sanford said individuals buying insurance through an association would be freed from job-lock and would be able to continue insurance with the same insurance company that covered a condition acquired with that company.
Given all the lessons learned from Obamacare, right now it the moment to fix the health care crisis, he said.
“It is an inflection point,” he said. “This is about: Where do we go next?”
Watch Wednesday’s press conference with Sen. Rand Paul (R.-Ky.) and members of the House Freedom Caucus:
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