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GOP unveils plan to replace PPACA

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Republicans have officially floated their latest counter proposal to Obamacare. But they won’t have one key business segment on their side: The benefits industry.

In a nutshell, the GOP proposal for extending health insurance to the masses would replace the Patient Protection and Affordable Care Act with the American Health Care Reform Act, the fulcrum of which is a substantial tax deduction for individuals and families that have qualifying health insurance. People wouldn’t face the same pressure to buy insurance as they do under PPACA, but would still be incentivized to do so.

The big item that goes away would be the employer tax exclusion, along with the self-employed health insurance deduction, key pieces of PPACA.

But benefits industry representatives have come to accept and even value the tenets of the act and are loathe to swap it out for a new unknown and unproven system.

The National Association of Health Underwriters’ position is that the swap-out would destroy the current system that, the organization says, is working just fine by offering affordable coverage to consumers and offering financial incentives for insurers to participate.

Other major industry players, such as the Society for Human Resource Management, have yet to weigh in on the proposal.

Key provisions of the legislation include the following:

  • A repeal of PPACA;

  • Claims to offer portable coverage to more Americans by offering the tax deduction to those covered at work and those without employer coverage;

  • Expands federal support for state high-risk pools and expands portability so consumers retain coverage regardless of their location;

  • Permits shopping for insurance across state lines;

  • Allows small businesses to form negotiating pools;

  • Establishes an 8-year, $15 billion research fund through the National Institutes of Health

See also:

What has PPACA really done to jobs?

Let’s ax the “Cadillac tax”