NCPA - National Center for Policy Analysis

GOP Divided on How to Replace Health Overhaul Law

September 28, 2010

One of the first acts of a Republican majority would be a vote to repeal what they dismiss as "Obamacare."  Some Republican proposals are as far-reaching as anything Democrats have tried.  A budget crisis could push them to the forefront because lowering health costs is critical to reducing record federal deficits.  Many of those ideas come from Rep. Paul Ryan, R-Wis., one of a group of younger lawmakers trying to energize the party leadership, says the Associated Press (AP).

Along with Sen. Tom Coburn, R-Okla., Ryan sponsored legislation that would begin to wean the middle-class away from job-based coverage and replace Medicaid with private insurance for most low-income people.  The idea is to foster personal responsibility, on the theory that consumers will seek better value for their health care dollars and help drive down costs, says the AP.

  • The Coburn-Ryan plan would make employer coverage taxable to the employee, but that would be offset with a tax credit available to all Americans.  
  • It could be used to buy coverage individually or to keep a plan at work.
  • In contrast to the Democrats' health care law, there would be no federal mandate that individuals get coverage or employers help pay for it.

The plan, however, is a hard sell, says the AP.

  • Any attempt to tamper with the tax-free status of employer health care is certain to provoke an all-out counterattack from labor unions.
  • It also risks antagonizing the seniors' lobby.

Repeal is not a surefire proposition.  Even if the Senate goes along, Obama could veto it and Republicans aren't likely to have enough votes to override.  But they have a backup plan that could work:  Use the congressional power of the purse to deny the administration funds to carry out the law, says the AP.

Source: Ricardo Alonso-Zaldivar, "GOP divided on how to replace health overhaul law," Associated Press, September 20, 2010.


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