The Republican Health Plan That Doesn't Repeal Obamacare

As the party struggles to agree on a replacement, a group of GOP senators unveil a bill that would give states the option to keep it.

Senators Bill Cassidy of Louisiana and Susan Collins of Maine unveil a Republican alternative to Obamacare. (J. Scott Applewhite / AP)

The vast majority of Republicans in Congress haven’t budged from their longstanding vow to completely repeal the Affordable Care Act. But as the party struggles to write a replacement, a few GOP lawmakers are declaring their support for keeping the law on the books in some form indefinitely.

A group of senators on Monday unveiled legislation that would give states the option of preserving Obamacare, securing federal support for a more conservative health-insurance system, or opting out of any assistance from Washington. Offered as a middle ground in the partisan health-care fight, the proposal breaks with years of Republican orthodoxy on the 2010 law, which party leaders have pledged to rip out “root and branch.”

“Republicans think that if you like your insurance, you can keep it. And we mean it,” said Senator Bill Cassidy, a Louisiana Republican and the lead author of legislation he has titled the Patient Freedom Act of 2017. “We give states the choice,” he said at a Capitol press conference. “So California and New York, you have Obamacare, you can keep it. I disagree with it, but Republicans think power is best held at the state level, not by Washington, D.C., so it’s not for us to dictate.”

Cassidy introduced a similar proposal last year along with Representative Pete Sessions, a House Republican from Texas. But the bill was ignored by Cassidy’s Senate colleagues and went nowhere. This time around, he’s secured early support from three fellow Republicans in the Senate: Susan Collins of Maine, Johnny Isakson of Georgia, and Shelley Moore Capito of West Virginia. Cassidy, Collins, and Isakson all sit on the Senate committee that will be charged with drafting a replacement plan for the Affordable Care Act.

The Cassidy bill would repeal both the employer and individual insurance mandates in Obamacare while retaining the more popular consumer protections allowing people to stay on their parents’ plan through age 26 and banning discrimination based on pre-existing conditions. It would still require insurers to cover mental-health and substance-abuse disorders. States could choose to continue to run ACA exchanges and expanded Medicaid, although there would be a 5 percent cut in federal support for subsidies and tax credits. Or they could receive the same level of federal funding to pursue a more conservative program based on expanded health savings accounts and high-deductible plans, which are the hallmarks of many Republican proposals to replace Obamacare.

Whether the Cassidy proposal could function as intended is unclear. The ACA is a complex and highly interconnected law, and its proponents have argued that keeping popular provisions while removing the mandates designed to make them affordable would be nearly impossible. States could also auto-enroll residents in basic health plans, which Cassidy said was designed as an alternative to the ACA’s requirement that individuals buy insurance or pay a tax penalty. Maintaining a large enough pool of healthy people enrolled in coverage, he acknowledged, was essential to continuing the ban on insurance companies being allowed to deny plans to consumers with conditions that would be more expensive to cover.

Another challenge for Cassidy and his colleagues is that their proposal represents a compromise at a moment when neither side of the healthcare fight is ready for one. Democrats attacked the plan for its funding cuts and for the likelihood that many Republican-led states would choose to abandon the federal law and kick millions of their residents off the exchanges and Medicaid. “Ultimately, this proposal is an empty facade that would create chaos—not care—for millions of Americans,” Senate Minority Leader Charles Schumer said.

Conservatives were equally dismissive of the proposal, which would keep the tax increases included in the original law. “It doesn’t repeal Obamacare, and that’s been a Republican pledge since 2010,” said Jason Pye, director of public policy and legislative affairs from FreedomWorks, the conservative advocacy group.

Pye said congressional Republicans must, at the very least, pass the same bill that former President Obama vetoed last year, the Restoring Americans’ Healthcare Freedom Reconciliation Act, which repealed all of the tax-and-spending provisions in the law. “Anything other than that, and there will be hell to pay from grassroots activists,” he told me. “We can’t nibble around the edges here. We can't sit here and try to be cute with this effort. We either need to be all in, or Republicans are going own Obamacare.” Dan Holler, a spokesman for the conservative Heritage Action, offered a similar criticism. “Giving states the ability to keep Obamacare will not empower patients; too many will remain trapped in a failing, centrally controlled system,” he said. “Congressional Republicans promised to repeal Obamacare for all Americans, not just some. They promised to provide more freedom and choice for all patients, not just some.”

That Cassidy’s bill is getting a second life exemplifies the GOP’s dilemma on Obamacare: Republican leaders want to repeal the law as fast as possible, but they have encountered resistance from President Trump and a growing number of rank-and-file lawmakers who are demanding that a replacement be ready immediately. Republican governors in states that embraced the ACA and expanded Medicaid have also warned Congress against taking action that could destabilize the insurance market and threaten coverage. “We recognize that our bill is not perfect. It is still a work in progress,” Collins said. “But if we do not start putting specific legislation on the table that can be debated, refined, amended, and enacted, then we will fail the American people.”

Trump on Friday signed an executive order aimed at laying the groundwork for repeal by directing federal agencies to ease the “burden” of the law on consumers, insurers, and businesses. But in a sign of the division among Republicans on the issue, Collins criticized the order as “very confusing.” “We really don’t know yet what the impact will be,” she said.

To supporters of Obamacare, the GOP bill represents less a serious policy proposal than an attempt by nervous legislators to grasp onto anything they can describe as a replacement.

“It shows that a handful of Republican senators are extremely uncomfortable with ‘repeal and delay,’ and they’re desperately looking for a way out,” said Topher Spiro, vice president for health policy at the liberal Center for American Progress.

The Cassidy bill could begin to look more appealing to some Democrats if Republicans succeed in repealing most of the Affordable Care Act later this year with a simple majority vote in the House and Senate. It would keep the law alive and offer the chance that states would re-embrace it once they’ve experienced the alternative. But as they watch Republicans struggle to keep the hardline promise they’ve made to their base, Democrats are in no hurry—yet—to negotiate.