ACA Replacement Bill Proposed ~ C.A.R.E. Act

From the time the Affordable Care Act (ACA) was signed into law on March 23, 2010, after having been passed by congress on a 100% partisan basis by the Democrat party, the Republican party has largely expressed opposition to the law.  In fact, the Republican controlled House of Representatives has passed upwards of 40 bills seeking to completely repeal the ACA.  However these bills never made it to the Democrat controlled Senate floor for a full vote, and thus “died on the vine”.  Perhaps no other issue facing our country has seen the level of opposition and discourse than has health care “reform”.

For the second time since the ACA’s passage, a replacement bill has been proposed, and interestingly, its origination is the U.S. Senate.  (Note: Late in 2013, Sen. John McCain and Rep. Tom Price introduced companion ACA replacement bills, which have not gained much traction in either chamber.)  Last week (01/27/2014) Republican Senators Orrin Hatch (UT), Tom Coburn (OK), and Richard Burr (NC) introduced the “Patient Choice, Affordability, Responsibility, and Empowerment Act”, or CARE.  Shortly thereafter (01/30/2014) House of Representatives leader Eric Cantor announced the House would be – “taking up a bill that mirrors the Hatch, Coburn, Burr bill later this year”.

There are three (3) reasons to believe this bill, or some variation thereof, may actually have a chance of replacing the ACA:
1. In the President’s state of the union address last week, he welcomed the offering of other health care reform solutions;
2. The midterm elections could result in a change in the control of the U.S. Senate; and
3. There is growing sentiment the ACA is not the best way forward for health care reform (according to several polls).

Here is a broad brush look at what the CARE Act seeks to accomplish:

  • Maintains several ACA provisions including: subsidies to help low income individuals purchase coverage; dependent eligibility to age 26; and bans on lifetime and annual coverage limits.
  • Removal of several ACA provisions including: employer mandate; individual mandate; minimum coverage requirements, the ban on pre-existing condition exclusions; and most of the taxes and fees. State health insurance exchanges would become optional.  (Note: under the proposal, pre-existing condition limitations would not apply to those who maintained continuous individual or group coverage, much the same as the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires of group health plans now.)
  • An income tax on employer provided health insurance of 35% of the portion of premium the employer pays.  Currently, employer provided health insurance is tax free.  This provision would impact roughly 150 million people who currently receive health insurance through their employer.
  • Income tax credits for individuals who don’t have access to employer provided coverage, the uninsured, and the poor. The amount of the tax credit, available to individuals earning up to three times the federal poverty rate, would be based on age rather than need, and would increase commensurately with age.  Interestingly, under the proposal, eligible tax credit recipients can opt to use the credits to pay for coverage or care.
  • Medicaid reform – the bill would make changes to Medicaid, providing states with a fixed amount of money per person enrolled to reduce spending.
  • Medical malpractice reforms
  • Improving Health Savings Accounts (HSA)
  • Health care transparency to better equip patients to be better health care consumers

For those interested in a more in-depth overview of the CARE Act, here is a link to it’s Legislative Proposal –

I will keep a close eye on the progression of this, and any other bill(s) that has the potential of replacing the ACA and becoming law, so stay tuned!