GOP Senators Planning Obamacare Substitute

January 27, 2015 Updated: January 29, 2015

A group of Senate Republicans say they are working on legislation to replace key-elements of Obamacare. The Supreme Court could strike down Obamacare in the case of King v. Burwell, which contests the legality of federal exchanges.

The plaintiffs in King argue that the Affordable Care Act (ACA) requires states to set up their own insurance exchanges, which only 14 states have done, and that the federal exchange covering 36 states is a statutory violation of the law.

However, if the Court does rule in favor of the plaintiffs, as many as 4 million Americans could lose their health insurance, and some Republicans worry that Chief Justice John Roberts might rule in favor of Obamacare to avoid disrupting the healthcare system, as many charged him of doing with his 2012 swing-vote to uphold as constitutional the ACA’s individual mandate.

The substitute, called the CARE Act, would keep much of the Obamacare subsidies in place but overhaul the distribution channel with tax credits and loosen the requirements for minimum insurance benefits. The bill also promises to keep protection for Americans with pre-existing conditions.

“With our plan, we’ve shown once again that by empowering Americans—not Washington—with the right tools and information, they will make the best informed health care decisions for themselves,” Sen. Orrin Hatch (R-Utah) said in a statement in 2014 when promoting an early draft of the legislative proposal.

Most importantly, the proposal would provide political cover for Roberts to strike down the federal exchange, as most of the states in the South have not set up their own exchanges. In the case that the Court does rule in the plaintiffs’ favor, however, it’s unlikely the CARE Act could be implemented in time to prevent people from losing their insurance.

Donald Taylor, associate professor at Duke Global Health Institute, said that Republicans will likely pass a short-term bill that would let subsidies flow through the federal exchanges as tax credits for the rest of the year before Congress can settle on a comprehensive solution.

“The trickiest thing for Republicans is, once you start trying to write substantive health policy changes, the bright lights come out,” Taylor said. “To this point Republicans have had trouble coalescing on one proposal.”

The “bright lights” refer to the Congressional Budget Office and committees in the House and Senate that would scrutinize the bill’s claims of pushing down health care costs and expanding access.

Taylor said another possibility would be for the administration to change the definition of a “state exchange” to make it easier for states to create a system that would qualify as such, but admits that it’s all speculative at this point.

 “There’s unbelievable uncertainty about all the possible outcomes,” Taylor said. “Part of that is based on how I don’t think anyone I know thought the Supreme Court would say the mixture of things it said in the first case [challenging Obamacare].”

The CARE Act doesn’t propose repealing the individual mandate in Obamacare, which forces people to buy insurance. The same group of Republican senators drafted a separate bill for that purpose early this year called the American Liberty Restoration Act.

CORRECTION: An earlier version of this article incorrectly stated that Senate Republicans were drafting legislation to replace parts of Obamacare. In fact, they are working on a legislative proposal, work that began in 2014. Epoch Times regrets the error.