3 Senate Republicans back alternative to President Obama's health care law

WASHINGTON – Three Senate Republicans on Monday proposed repealing the nation’s controversial health care law in favour of a replacement that eliminates most of the government coverage mandates it imposed and offers tax breaks to help the lower-income obtain coverage.

The supporters of the proposal, Sens. Orrin Hatch of Utah, Tom Coburn of Oklahoma and Richard Burr of North Carolina, said in a written statement that their goal was to “reduce health care costs and increase access to affordable, high quality care.”

The plan is a rarity among congressional Republicans, who vowed more than three years to “repeal and replace” President Barack Obama’s health care law, also known as ‘Obamacare,’ but since then have focused almost exclusively on trying to repeal it without advancing a comprehensive alternative.

As described by aides, the size of the tax credits envisioned in the alternative would be determined by age and income, and be available to the unemployed as well as those seeking individual coverage or working for smaller companies. Those with incomes up to three times the federal poverty level — generally $70,650 for a family of four — would be eligible.

The proposal repeals all of the tax increases that have taken effect with the new health care law, including one on medical devices and another on high-cost insurance plans. Yet it would impose a new one by limiting the tax exemption that individuals are allowed to take for the cost of their health insurance premiums.

Under current law, 100 per cent of premiums are exempt from federal income tax, and the proposal would reduce that to 65 per cent.

In addition to raising money to help finance the tax breaks for those with lower incomes, the change would help control the cost of coverage, aides said.

Under the proposal, employers that provide health care would be permitted to deduct their full cost, as is now the case.

In another major change, the proposal would roll back the expansion of Medicaid that is a central part of the new health care law. In its place, Republicans proposed giving individual states a fixed amount to pay for care of their poor residents, based on the number of individuals who live at or below the poverty level.

Republicans said they did not have overall cost estimates for the legislation, or of the impact it would have on the uninsured population. In a written statement, they said that generally speaking, it would neither raise nor lower deficits over a decade, yet achieve “significant savings for consumers and taxpayers.”

The aides who described the plan said that by repealing many of the requirements contained in the health care law, the legislation would reduce the cost of health care.

As an example, they said a requirement for insurance plans to cover 10 specific areas would be eliminated, and added that states could opt out of a rule that says children must be covered on a parent’s plan until age 26.

The requirement for individuals to carry coverage would be repealed.

Aides said the Republican plan would eliminate caps on lifetime benefit limits on coverage, one of the few cases in which an Obamacare-imposed requirement would be renewed.

They added that individuals who lost their insurance and obtained a replacement, either from a new job or by purchasing it individually, could not be denied coverage based on pre-existing medical conditions.

Yet those who lost their insurance and then chose not to buy a replacement policy could be denied coverage for a pre-existing condition if they sought new insurance at a later date.

In their written statement, Hatch, Coburn and Burr pledged to work with fellow lawmakers to “further refine” their proposal.

Republicans acknowledge that no attempt to repeal the current law has any chance of success as long as Obama is in office.