Rand Paul's ACA Plan Would Do Away With Individual Mandate
Kentucky Sen. Rand Paul introduced a bill to repeal and replace the Affordable Care Act on Wednesday that would do away with the law's major reforms, including the requirement to have health insurance or pay a penalty and the ban on insurers refusing coverage for those with pre-existing conditions.
Under the proposal, people wouldn’t be required to get health insurance, nor would employers be required to offer it. Instead, groups of people and small employers could come together to form "independent health pools" to negotiate rates.
“What we’d like is [for people] to get insurance through associations, and then you’d have leverage on cost and get insurance policies that would protect you from being dropped and from your prices go up if someone in your pool gets sick,” Paul said in a conference call Wednesday.
He added that Tom Price, the nominee to head the Department of Health and Human Services, has touted that idea.
These nonprofits would provide insurance through contracts with health insurers. Small businesses would also be able to come together across state lines to purchase health coverage under the plan.
The Affordable Care Act set a threshold for the quality of benefits sold – the Paul plan would do away with that. Health insurers would no longer be required to offer hospital stays, newborn care, mental health treatment or prescription drugs.
“Insurance companies would be able to market inexpensive insurance again,” Paul said.
Under Paul's plan, health savings accounts would be the main way to purchase health insurance. Individuals could save an unlimited amount a year to pay for medical expenses, but that money would come out of their own pocket. The amount in the health savings account would be tax-deductible.
And for people with insurance through their employer, premiums would also be tax-deductible under the plan. The same wouldn’t apply for people buying their own insurance, but they could get a tax deduction on the premiums they paid.
Under the plan, individuals with pre-existing conditions could obtain insurance within two years of repeal and not face higher premiums or denial of coverage.
In terms of charity care, doctors could take a tax deduction for patient debt that hadn’t been paid. That would be limited to 10 percent of the doctor’s gross income for a year. That would take the place of the uncompensated care program, where the federal government and states reimburse a portion of this cost.
The bill comes after Republican Sen. Bill Cassidy of Louisiana announced another replacement plan last week. That plan would let states keep the ACA, otherwise known as Obamacare. It would also keep the taxes enacted by the ACA.
Paul said that won’t work for voters.
“I don’t think a lot of Republicans will want to keep Obamacare. I suspect it’ll divide Republicans,” he said. “I also think that ‘if you like Obamacare you can keep it' is not a rallying cry Republicans across the country will rally to. The vast majority thought that they were voting to repeal it, not keep it.”