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Here’s Why The GOP Should Kill Its Replacement Plan And Simply Repeal Obamacare

The House GOP is pushing its replacement plan for Obamacare, which leaves most of Obamacare’s regulations in place as well as some of its spending. The GOP was attempting to fend off charges that a full repeal of Obamacare would heartlessly reduce the number of Americans with health insurance.

But as Phillip Klein points out in the Washington Examiner, that’s a losing game, as the Congressional Budget Office’s estimate of the GOP replacement plan found that it would leave 51 million people uninsured in 2025, as opposed to the 50 million uninsured projected by the CBO two years ago if there were a full repeal of Obamacare.

Klein asks:

How could that possibly be? How could a Republican plan that spends hundreds of billions of dollars offering tax credits to individuals and winds down Obamacare over several years cover no more people than a straight, immediate, full repeal would have? The reason is that the Republican replacement preserves many of Obamacare's regulations that drive up the cost of insurance. So, in essence, the GOP alternative would be asking people to purchase expensive Obamacare plans, with less financial assistance. In contrast, while full repeal would offer no assistance, because it would get rid of Obamacare's regulations, it would make insurance cheaper.

So if a full repeal would ultimately benefit Americans by making insurance cheaper, why doesn’t the GOP pursue that option?

The argument most often offered is that changing regulations cannot be executed through reconciliation, which allows the Senate legislation to pass through the Senate with a simple majority as long as its provisions are strictly budgetary. But as Klein explains:

Obamacare's regulations have a very direct budgetary impact. As the CBO writes regarding the increasing premiums under Obamacare, ‘most subsidized enrollees purchasing health insurance coverage in the nongroup market are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income; the government pays the difference.’ In other words, any changes in policy that affect the price of premiums are going to increase federal spending.

Klein also points out other budgetary issues that would allow reconciliation to be utilized: “The House bill makes other regulatory changes, such as allowing insurers to charge older people five times as much for insurance as they charge younger people (changing the ratio from 3:1 under Obamacare). It also creates a new mechanism to incentivize people to purchase insurance, by issuing a 30 percent premium surcharge on individuals who go more than two months without insurance within a year then try to buy it.”

So if a full repeal would ultimately benefit Americans by making insurance cheaper, why doesn’t the GOP pursue that option?

The chance is there for the GOP to fully repeal Obamacare. But do they have the guts to do it?

 
 
 

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