On Monday, Sens. Richard Burr, Tom Coburn and Orrin Hatch unveiled their Obamacare alternative, just in time for President Obama's State of the Union address. Their new version of Obamacare seems pretty similar to the old version of Obamacare, just worse, especially if you're old, a dependent under 26, or receive a tax credit.
Politically, this gives the senators the opportunity to say that they want repeal and replace the law. But in actuality they have a plan that reduces some of the most popular provisions of Obamacare — tax credits and guaranteed coverage for dependents up to age 26 — and doesn't address what would happen if the insurance industry had to undo its work for the law.
There are big differences, of course. The GOP plan drops all mandates, pushes health savings plans, and reintroduces high risk pools (with penalties for insurers for referring too many patients). It also drops policies like the medical device tax, but doesn't offer a way to pay for things like tax credits — which, under their plan would be available to people even if they qualify for Medicaid, as well as small business employees. More importantly, it doesn't acknowledge the effect of repeal on the insurance industry, but assumes that the very repeal of Obamacare will lower premium costs across the board. In a Fox News op-ed, the authors of the plan write that "unlike ObamaCare, our plan acknowledges the real world in which people live and operate." We're not so sure about that, but here are three provisions of Obamacare currently active in the real world that the GOP plan changes for the worse.
Limits how much older individuals may be charged
Currently, plans can only charge older patients three times more than younger patients. Under the GOP plan, older patients could be charged up to five times more. But states are also free to be more or less restrictive with that ratio. Somehow, argue the plan authors, that will help lower the cost of healthcare "for millions of Americans." But probably not old people.
Offers coverage to dependents up to age 26
Maybe. "Similar to the federal baseline for insurance plan rating, any state could choose to opt out of this provision for the plans it regulates." Coverage for people under 26 have been one of the least controversial parts of Obamacare. Currently, 3.1 million Americans are insured thanks to their parents' plan. The GOP plan allows for the coverage to continue, but also gives states the power to take it away.
Offers tax credits
"Our proposal would provide a targeted tax credit to certain individuals which could solely be used for the purpose of helping to buy health care," reads the plan. The tax credits would be lower, and only available for people making 300 percent of the federal poverty level (currently it's 400 percent). The chart above outlines what the tax credit might be.
It's worth noting that tax credits are also available to people who qualify for or opt out of Medicaid. That's the sort of idea that might make Obamacare better — if the millions of Americans who were stuck in the Medicaid gap (in states that haven't expanded Medicaid) were eligible for subsidies, they might be insured.
Protections for people with pre-existing conditions
The GOP plan introduces a "continuous coverage" clause into the protections for people with pre-existing conditions. "As long as an individual maintains continuous coverage from one plan to another, they could not be medically unwritten and denied coverage based on a pre-existing condition," the plan reads. The idea is to "incentivize responsible behaviors" by encouraging people to stay insured with at least catastrophic coverage for 18 months with no major breaks in coverage. Based on that rule, however, people who couldn't afford insurance might find themselves out of luck if they tried to enroll later.