Here's Rand Paul's Plan To Replace Obamacare

Paul's plan would do away with essentially all of the key rules of Obamacare and allow insurance companies to offer cheaper — but much less robust — plans across state lines.

WASHINGTON — Republican Sen. Rand Paul has released an Obamacare repeal plan that would do away with the individual mandate, the ban on insurance companies denying coverage for people with pre-existing conditions, and the essential health benefit requirements for insurance plans.

Paul's plan would essentially strip away the entire health system set up by the Affordable Care Act and replace it with tax credits, private health savings accounts and a heavily deregulated insurance market. Many of the ideas have been floated in Republican health policy circles for years.

It stands in sharp contrast to the recently released repeal plan from a group of moderate Republican senators that would keep the taxes and expenses of the ACA, and would even let states choose to stay in Obamacare if they prefer it.

Paul will likely have a hard time winning support for his plan from Democrats, who have vigorously opposed similar proposals, and even some Republicans because it does away with the ban on denying insurance to people because of pre-existing conditions. President Donald Trump and other Republicans had promised to keep that provision in place.

Paul's plan would provide a two-year "open enrollment" period during which people with pre-existing conditions could not be denied coverage. After that window, the laws would revert to as they were before the ACA.

The plan would undo the individual and employer mandates under Obamacare, thus allowing people to forego buying insurance without paying a penalty. It also does away with provisions to beef up health coverage that rely on these mandates.

Paul's plan would do away with the essential health benefit requirements of the ACA. These require individual and small group health insurance plans to offer benefits without cost limits for things like maternity and newborn care, pediatric services, hospital care, some prescription drugs, and preventative medicine.

This would allow insurance companies to offer cheaper plans, albeit ones with inferior coverage than what is currently mandated. The plan also does away with the rule requiring health insurance companies to spend at least 80% of the money they take in on health care rather than overhead and marketing.

States would have limited ability to pass their own rules and standards. Paul's plan would allow insurance companies to sell plans across state lines while only being beholden to the laws of their home state. So if Texas has more lax insurance standards than Massachusetts, a Texas insurance company could compete in the Massachusetts market while being exempt from the stricter laws there.

Paul's plan would provide a $5,000-per-person tax credit towards a health savings account that could be used to pay for insurance. It would remove current restrictions on these savings accounts and on small businesses looking to pool together health plans.

The plan would establish independent health pools to allow individuals to pool together when buying insurance.

Though Paul's plan is wildly different from the one released earlier this week by Republican Senators Bill Cassidy and Susan Collins, they all argue repeal of the ACA should not begin until a replacement plan is known.

While Republicans can repeal broad swaths of the ACA on their own, they'll need the help of at least eight Senate Democrats to pass a replacement plan. Cassidy and Collins argue the strength of their plan is it could win bipartisan support by allowing states to stay on Obamacare.

Senate Minority Leader Nancy Pelosi dismissed both plans at a press conference Wednesday morning as mere "suggestions." She said the plan of real importance will be the one released by President Trump.

Trump has not released his Obamacare replacement plan yet but hours after being sworn in he signed an executive order directing the heads of federal agencies to do what they can to defang the Obamacare regulations.

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