What’s in the Freedom Caucus Obamacare Repeal Bill

The House Freedom Caucus unveiled an Obamacare repeal bill this week that passed through the House and Senate in 2015 and would repeal the vast majority of the Affordable Care Act.

The bill sponsored by former Freedom Caucus chair Rep. Jim Jordan (R-OH) contrasts dramatically with the House-passed American Health Care Act (AHCA) and the Senate leadership’s Better Care Reconciliation Act (BCRA). Congressman Jordan’s bill mirrors the 2015 Obamacare repeal bill; the 2015 repeal bill passed through both the House and the Senate and would have been signed into law if there were a Republican in the White House.

Here are some of the major tenets of the Obamacare repeal bill sponsored by the Freedom Caucus:

Individual Mandate

Under Obamacare, people without insurance are required to purchase it or pay a penalty. The AHCA replaces the individual mandate penalty with a penalty payable to the health insurance companies. Individuals who forgo health insurance for longer than 63 days face a 30 percent surcharge on their health insurance premiums.

The BCRA would repeal Obamacare’s individual mandate.

The Freedom Caucus plan would repeal the individual mandate to purchase health insurance.

Employer Mandate

Obamacare required that businesses with 50 or more full-time employees provide their employees and dependents with health insurance. The House’s AHCA, the Senate’s BCRA, and the Freedom Caucus plan repeal Obamacare’s employer mandate.

Obamacare Taxes

The House, Senate, and Freedom Caucus bills repeal roughly $1 trillion in taxes, except that the latest BCRA retains Obamacare’s next investment tax, the Medicare insurance tax, and the remuneration tax on executive compensation for health insurance executives. The House and the Senate bills delay the “Cadillac tax” on high-cost employer sponsored health care plans until 2026, whereas the House bill retains the Cadillac tax.

Changes to Medicaid

Obamacare expanded Medicaid, which allowed more low-income Americans to purchase health insurance. Thirty-two states expanded Medicaid under Obamacare, and the House, Senate, and Freedom Caucus bills make drastic changes to Medicaid.

The House’s AHCA will end Obamacare’s Medicaid expansion by 2020, after which the program would cap Medicaid spending per capita. States also have the option to block grant Medicaid, allowing states to have more control over Medicaid spending.

The BCRA will phase out Obamacare’s Medicaid expansion over the next seven years, cap Medicaid spending per capita, and allow states to block grant Medicaid spending.

The bill allows an exception to the per capita caps wherein states could lift the cap in the event of an emergency such as the Zika virus outbreak. Sen. Marco Rubio (R-FL) fought for the BCRA to include this amendment.

The House and Senate bill would allow states to impose work requirements for Medicaid on able-bodied adults without dependents.

The Freedom Caucus plan would eliminate Obamacare’s Medicaid expansion over a two-year period, ending on December 31, 2018.

Obamacare Insurance Regulations

The AHCA retains Obamacare’s essential health benefits, although states can obtain waivers that allow them to waive Obamacare insurance regulations such as essential health benefits and community ratings.

The essential health benefits provision requires that insurers maintain a minimum level of coverage, including emergency services, prescription drugs, laboratory services, vision, and dental.  Community ratings mandate that health insurers cannot vary insurance premiums for individuals based on age, gender, location, or health status.

The CBO report of the House’s AHCA estimates that if states were to make moderate changes to Obamacare’s insurance regulations, average premiums would lower by 20 percent. However, sicker and older Americans would pay higher average premiums than under the Affordable Care Act.

The Senate bill allows states to apply for waivers for some Obamacare insurance regulations. According to the CBO, the BCRA would lower average premiums by roughly 25 percent.

Sens. Ted Cruz (R-TX) and Mike Lee (R-UT) pushed for a consumer choice amendment that would allow health insurers to offer plans that do not comply with Obamacare regulations as long as they offer plans that do adhere to the rules.

The new BCRA includes a tweaked version of the Cruz amendment that stipulates if health insurers were to cover a “sufficient minimum coverage” on the Affordable Care Act (ACA) exchanges, then they could also offer more affordable health plans outside of the Obamacare exchanges — exempt from many Obamacare insurance regulations.

Sens. Mike Lee and Jerry Moran (R-KS) stopped the BCRA, arguing that Senate Majority Leader Mitch McConnell watered down the Cruz-Lee consumer choice amendment.

The Freedom Caucus plan does not alter the Obamacare insurance regulations.

Obamacare Subsidies

The House and Senate bills replace Obamacare’s subsidies for Americans to purchase health insurance with refundable tax credits. The House’s AHCA doles out tax credits based on age, not income, whereas the Senate bill features more generous and means-tested tax credits.

The Freedom Caucus phases out the Obamacare subsidies for lower and middle-class Americans to purchase health insurance through the Obamacare exchanges. The plan sponsored by Rep. Jim Jordan also repeals the cost-sharing subsidy to health insurers to help the insurance companies reduce co-payments and deductibles to lower the costs associated with low-income Obamacare recipients. Sen. Rand Paul told Breitbart News that the Senate bill gives over $100 billion to insurance companies as direct subsidies.

Obamacare Exchanges

Obamacare created health insurance marketplaces for individuals to purchase plans eligible for federal government subsidies.

The House and Senate bills use their tax credits to continue to prop up the Obamacare exchanges to encourage Americans to purchase health insurance through the Obamacare marketplaces. Both bills also include over $100 billion in “State Stabilization” funds meant to help lower the price of premiums and increase healthcare coverage in Obamacare exchanges.

The Freedom Caucus plan eliminates funding for territories such as Guam or Puerto Rico to set up Obamacare exchanges.

What are the next steps?

The AHCA passed through the House, while its sister bill, the BCRA, remains log jammed in the Senate. The Senate plans to vote on the 2015 Obamacare repeal bill early next week, even though moderate Sens. Lisa Murkowski (R-AK), Rob Portman (R-OH), Shelly Moore Capito (R-WV), and Susan Collins (R-ME) oppose any bill that would repeal Obamacare without including the Affordable Care Act’s replacement. Recently conservatives have branded Sens. Murkowski, Portman, and Capito “traitors” for their opposition to repealing Obamacare when they voted to repeal Obamacare in 2015.

Rep. Tom Garrett filed a discharge petition that would put that clean Obamacare repeal bill before the House. The discharge petition has to remain at the House Clerk’s office for seven legislative days, after which, if the Freedom Caucus gets 218 signatures, then the House will have to vote on the bill on the chamber’s floor.

Garrett said, “I commend both the President and Republican leadership for working to replace the monstrosity that is Obamacare. However, we have seen discussions for replacement continue to stall and we must change our approach to reforming healthcare.”

The Virginia congressman concluded:

The House should lead with an incremental approach by supporting a clean-repeal bill and then enter into replacement negotiations. As such, I just initiated a seldom-used parliamentary procedure to advance H.R. 1436 through a discharge petition. The overwhelming majority of my Republican colleagues cast their vote in support of this legislation in 2015, and I have faith they will do nothing short of that now.

Congressman Jim Jordan, the bill’s sponsor, told Breitbart News that “there is no other way” to repeal Obamacare.

House Freedom Caucus Chairman Mark Meadows explained to Breitbart News in an exclusive interview that Republicans must take action to repeal Obamacare. Meadows charged, “the time for talk is over, we must provide real action, real results, or the American people will never regain the confidence in government that we promise we would restore.”

Read H.R. 1436, the Freedom Caucus plan, here.