The Obamacare Replacement Act

Senator Rand Paul introduced the Obamacare Replacement Act on January 25th, which would repeal much of Title 1 of the Affordable Care Act (ACA), including:

  • Most consumer protections (except as outlined below)
  • Rating restrictions
  • Rate review requirements
  • Essential Health Benefits
  • Medical loss ratio requirements
  • Individual and employer coverage mandates

The bill would restore certain market rules:
  • Coverage under family plans for young adults up to age 26
  • Requirements related to coverage of clinical trials
  • Requirements related to disclosure of information about health plans
  • Non-discrimination against providers

In place of the individual coverage mandate, the bill would provide a limited two-year open enrollment period for those with preexisting conditions and otherwise only provide HIPAA preexisting condition protections in the group market.

The bill would also eliminate the tax exclusion for employer-based premium payments and instead provide a universal payroll and income tax deduction. It would also expand Health Savings Accounts (HSAs), provide tax credits via HSAs, remove contribution restrictions and requirements that HSAs be used with High-Deductible Health Plans, expand allowable HSA expenses (including for use for premiums), and allow HSAs to be retroactive and rolled-over.

The bill would expand Association Health Plans and create Independent Health Pools to allow individuals and small groups to band together to purchase large group insurance that is not subject to individual and small group rules, including benefit mandates. It would also allow coverage licensed in one state to be sold in other states, subject only to consumer protections and taxes in subsequent states.

Physicians would be eligible for tax deductions for uncompensated care and providers would have greater antitrust protections when negotiating contracts with insurers.

States would also have greater flexibility under Medicaid waiver authority.