Rand Paul's ACA Replacement Relies on HSAs and Selling Across State Lines

The steps to repeal the Affordable Care Act (ACA) were set into motion even before President Donald Trump took office, when the House and the Senate voted to begin the process. Now, potential replacement plans are taking shape.

Just days after Senators Bill Cassidy, R-Louisiana, and Susan Collins, R-Maine, introduced their Patient Freedom Act, Senator Rand Paul, R-Kentucky, has unveiled his own replacement legislation: The Obamacare Replacement Act. Paul has been a huge proponent of replacing the ACA simultaneously with repealing it.

Paul’s legislation would get rid of some, but not all, of the ACA. If passed, it would immediately repeal mandates of the law, such as the individual and employer mandates, community rating restrictions, rate review, essential health benefits requirement, and medical loss ratio.

“Getting government out of the American people’s way and putting them back in charge of their own healthcare decisions will deliver a strong, efficient system that doesn’t force them to empty out their pockets to cover their medical bills,” Paul said in a statement. “There is no excuse for waiting to craft an alternative until after we repeal Obamacare, and the Obamacare Replacement Act charts a new path forward that will insure the most people possible at the lowest price.”

Paul’s plan would expand the use of health savings accounts (HSAs)—a popular GOP strategy—such as by removing maximum contribution limits, providing tax credits, and allowing HSA funds to be used to purchase insurance and cover the cost of premiums.

The plan also proposes letting health insurance be sold across state lines—something Trump supports—letting individuals pool together to purchase insurance, and letting small businesses pool together through an association to purchase coverage, which would also require purchasing coverage across state lines.

His plan would keep protections for preexisting conditions—one of the most popular provisions in the ACA. However, the plan he released only says that the legislation “provides a 2-year open-enrollment period” for individuals with preexisting conditions to purchase insurance.

Ron Pollack, executive director of Families USA, said in a statement that Paul’s bill would not provide adequate protection for people and would cause millions to lose their health insurance.

“This is not a replacement bill, but a full scale retreat from the financial and consumer protections of the Affordable Care Act,” Pollack said. “Insurers would again be allowed to discriminate against people with pre-existing conditions. It would gut essential benefits, meaning coverage for essential care, like mental health, could be gone.”

Cassidy and Collins’ plan would provide states the option to keep the ACA—something New York and California might be happy to do—or choose an alternative federal option. The bill is co-sponsored by Senators Lindsey Graham, R-South Carolina; Shelley Moore Capito, R-West Virginia; and Johnny Isakson, R-Georgia, but Paul and other conservatives don’t support it, reported The Hill. In a press call, Paul said he didn’t think the concept of letting states that like the ACA keep it was a “ringing rallying cry.”

Pollack and Families USA also expressed dissatisfaction with the Cassidy-Collins proposal, claiming that it will cause out-of-pocket costs to increase while eroding protections for individuals with preexisting conditions.

“This is not a true replacement bill,” Pollack said. “It’s not even the true Republican replacement plan. And it falls way short of providing the protections and coverage people have under the Affordable Care Act.”