Obamacare replacement plan: What's in the Republican proposal?

Congressional Republicans have long talked about repealing and replacing the Affordable Care Act, also known as Obamacare. They’ve spent lots of time focusing on the repeal side of that equation, as shown by Wednesday’s news that the House will soon vote on a stopgap government funding measure that would strip all funds from the president’s signature health-care law.

But what about “replace”? There’s been less discussion in the GOP about what might come next if the party could successfully stop Obamacare. On Wednesday, the House Republican Study Committee attempted to remedy this situation by offering its own version of a US health system future: the American Health Care Reform Act.

(No, no one is calling this “Boehnercare,” after House Speaker John Boehner. Not yet, anyway.)

“While we continue fighting to repeal the president’s health care law, it is also important to lay out the reforms we stand behind and support,” said Rep. Steve Scalise (R) of Louisiana, Republican Study Committee chairman.

So what’s in it? At its heart, the legislation would replace Obamacare’s system of state health-care exchanges and government subsidies for lower-income Americans with a health insurance tax deduction of $7,500 for individuals and $20,000 for families.

The deduction would apply to both employer-provided insurance and plans purchased on the individual open market.

“This tax benefit will be portable, will provide payroll tax relief to the working poor, and will give families the flexibility to choose a plan that best fits their needs,” says a summary of the bill posted on the RSC website.

The bill would expand access to tax deductible health savings accounts and increase federal support for state high-risk pools, which provide insurance to those whose health conditions might otherwise price them out of the insurance market.

It would also allow insurance firms to sell health-care policies across state lines and mandate some tort reforms, such as a cap on attorney fees in medical malpractice cases.

These are “common-sense ... free-market solutions which giver American families more choices without the unworkable mandates and billions in taxes included in President Obama’s health care law,” said Representative Scalise.

Liberal critics say the tax deductions in the RSC proposal would possibly encourage healthy people to drop out of employer-provided coverage, and encourage employers to stop offering it. In general, the proposal contains little to actually expand the number of Americans with coverage, writes Jon Walker on the left-leaning blog "FireDogLake."

“This is not a universal health care plan and would probably produce a worse system than the one we currently have,” writes Mr. Walker. “Modern American conservatism has basically redefined itself to make any mechanism to get universal coverage incompatible with conservative principles.”