Penalties add uncertainty to health care outcome | News

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WASHINGTON – The penalty provisions of the Affordable Care Act and the Republican replacement plan have created a conundrum for GOP leaders in their push for a new national health care law.

The ACA, also known as Obamacare, requires most Americans to pay a fine if they don’t have health insurance, a provision designed to encourage younger and healthier people to sign up in order expand the insured pool and keep premium rates low.

House Republicans have introduced legislation to eliminate that requirement but, in turn, impose a 30 percent surcharge on individuals who drop or lose their health insurance for two months or more and then decide to repurchase a policy.

The GOP penalty is designed to encourage people of all ages and health conditions to keep their insurance even though the replacement law would not require they do so.

The puzzlement is will it work? And does substituting an option surcharge for a mandated fine mean Republicans are getting government out of health care?

Obamacare supporters say no; that killing the mandatory requirement for insurance or pay a fine feature has helped reduce the number of uninsured in the U.S. by more than 20 million, and that the less burdensome Republican penalty will have the opposite effect.

Rep. Bill Pascrell, D-N.J., said the Republican 30 percent surcharge feature would only profit big insurance companies, mocking the GOP’s criticism of Obamacare’s fine for the uninsured.

“Pay a fine, tyranny!” he said. “Pay money to the bug guys, liberty!”

Thursday, the House Budget Committee voted 19-17 to send the Republican health care plan to the full House for a decision, with these nonbinding recommendations: make additional cuts to Obamacare’s Medicaid program and require its able-bodied recipients to work in exchange for their benefits.

Three Republican members of the committee – Reps. Gary Palmer of Alabama, Dave Brat of Virginia and Mark Sanford of North Carolina – opposed the GOP plan on the ground it didn’t go far enough in overhauling Obamacare. All 14 Democrat members of the committee also voted against the legislation, as expected.

Republican Rep. Diane Black of Tennessee, chair of the House Budget Committee, urged approval because the GOP plan takes “health care decisions away from the government and gives them back to patients and doctors.”

Rep. John Yarmouth of Kentucky, the committee’s ranking Democrat, argued strongly against it, describing the proposal as “Robin Hood in reverse, but far worse.”

The Budget Committee vote sets the stage for a robust debate on the House floor next week and perhaps beyond. A majority of House members must vote for the bill to send it to the Senate.

Republicans hold the majority in both the House and the Senate.

Yet division over the plan in Republican ranks has put the House outcome in doubt. Party moderates are worried about projections that the GOP plan will leave 24 million more Americans without health insurance over the next decade, and raise premiums on lower income and older Americans. Republican conservatives object to the plan’s coverage of preexisting medical conditions and continuation of Medicaid expansion.

Rep. Jody Hice, R-Ga., member of the conservative Freedom Caucus, has also expressed concern about a “30 percent penalty for those who drop their insurance, perhaps just for unfortunate times they fall into.”

Sen. Rand Paul, R-Ky., went even further Wednesday at a Capitol Hill rally of Tea Party supporters, calling the surcharge “worse” than keeping the individual mandate. “Instead of paying the government the mandate, they want you to pay a penalty if you lose your job or your insurance to a billion dollar insurance company,” he said.

The Commonwealth Fund, a private health policy foundation, has estimated that 30 million people last year had a lapse in coverage of more than two straight months. They would be subject to the 30 percent surcharge if the GOP plan becomes law and they later decided to repurchase health insurance.

Sara Collins of the foundation said it estimated 5 million Americans paid federal fines in lieu of buying health insurance last year under the Affordable Care Ac

Blue Cross and Blue Shield Association informed Congress earlier this year that the Republican penalty could raise premiums across the board as younger, healthier people would likely go without health insurance to avoid the surcharge.

Those willing to pay the 30 percent penalty, the association said, would be people who need medical care, including individuals with preexisting conditions, “raising premiums and lowering the number of people covered.”

Still, Rep. Larry Bucshon, R-Ind., said there’s a big difference between requiring a surcharge for lapsed coverage and finding the uninsured. The latter, he said, “sends the IRS after Americans who don’t purchase government-mandated health insurance.”

Contact Washington reporter Kery Murakami at kmurakami@cnhi.com.

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Penalties add uncertainty to health care outcome | News

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