Another Republican senator, Senator Rand Paul of Kentucky, has introduced a plan to replace the Affordable Care Act. The plan emphasizes the deregulation of the health insurance industry and the use of tax credits to encourage individuals to save for their health care expenses. According to a fact sheet, Senator Paul’s plan would do away with several popular aspects of the Affordable Care Act, including the guarantee of coverage for those with preexisting conditions and the ability to carry children on a parent’s health insurance plan until age 26.
Here are some key points to know about Senator Paul’s plan:
- It does away with guaranteed coverage for those with preexisting conditions, but not immediately. Those with preexisting conditions would be given a two-year open enrollment period where they would be guaranteed coverage. After that, it’s assumed that the law would revert to pre-Affordable Care Act days, when insurance companies could deny coverage for preexisting conditions.
- There would be no mandate for individuals to have health insurance.
- Insurance companies would be allowed to sell insurance across state lines. There’s an interesting kicker to this – insurance companies can designate a home state and then follow the regulations of that state only; the regulations of another state could not be more strict than regulations of the home state. In other words, if Massachusetts requires health insurance companies to have no lifetime ceiling on benefits and Texas puts a $1 million cap on benefits, then health insurance companies based in Texas would follow Texas rules even when they sold insurance in Massachusetts.
- Speaking of lifetime caps, there would be no minimum standards for what a health insurance plan would need to cover. This would mean the return of catastrophic care insurance plans, which are cheap, but less than helpful for those with chronic conditions.
- The plan would allow more people to utilize Health Savings Accounts, giving those who save for health expenses a tax credit of up to $5,000. In the past, only those who had plans with high deductibles were allowed to utilize Health Savings Accounts.
- The plan allows for the creation of something called Individual Health Pools, which allows individuals to pool together for coverage. According to the fact sheet, an Individual Health Pool “can include nonprofit organizations (including churches, alumni associations, trade associations, other civic groups, or entities formed strictly for establishing an IHP) so long as the organization does not condition membership on any health status-related factor.”
Now that last point, to me, is the most intriguing. Could membership in, say, JDRF count? It’s not like JDRF requires that you have Type 1 diabetes to be a donating member. If Senator Paul’s plan were enacted, one could see JDRF or the American Diabetes Association becoming the best place to shop for individual health insurance for people with diabetes…unless insurance companies could make an obvious argument in court that these organizations are focused on diabetes.
This is the second replacement plan revealed by Republican senators; Senators Susan Collins of Maine and Bill Cassidy of Louisiana introduced a plan that would allow states more choice in health insurance regulation, and would guarantee coverage for preexisting conditions. There hasn’t yet been much official chatter about Senator Paul’s plan, and that could be because it does away with the most popular provisions of the Affordable Care Act, which might make it a non-starter in the Senate among Democrats and some Republicans.
You can read the fact-sheet about Senator Paul’s plan here.
And read about the Collins-Cassidy plan here.
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