Rand Paul just introduced his 'Obamacare Replacement Act'

  • Sen. Rand Paul introduced “The Obamacare Replacement Act” on Wednesday.
  • The bill would remove parts of the Affordable Care Act including the individual mandate and minimum standards for care. It would also provide a two-year window for people with pre-existing conditions to sign up for care.
  • It also includes new provisions such as an expanded ability for insurers to sell plans in multiple states and a $5,000 tax credit that people can put towards a Health Savings Account.

Sen. Rand Paul, the libertarian-leaning Republican and one-time presidential candidate, introduced his own version of a replacement for the Affordable Care Act (ACA), better known as Obamacare.

The bill, named “The Obamacare Replacement Act,” would eliminate a number of provisions from Obamacare including the individual mandate and minimums on coverage standards. The fact sheet of the bill makes no mention of a provision to allow parents to keep a child on their insurance until they turn 26.

Interestingly, Paul’s plan would provide a two-year window for people with pre-existing conditions to sign up for care, then revert back to pre-ACA rules in which people with pre-existing conditions could still get coverage in the group market. It is unclear what would happen to those in the individual market with pre-existing conditions after the two-year open enrollment period.

Additionally, the bill would provide every American with a tax credit worth up to $5,000 for contributions to a health savings account (HSA) to put towards health insurance and other healthcare costs.

“Getting government out of the American people’s way and putting them back in charge of their own health care decisions will deliver a strong, efficient system that doesn’t force them to empty out their pockets to cover their medical bills,” said Paul, an ophthalmologist, in a press release announcing the bill.

Paul, however, also said that the repeal of the ACA should not move forward without a replacement ready to go.

“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,” said the release.

Paul was the only Senate Republican to vote against a resolution that kicked off the Obamacare repeal process, citing concerns that a repeal without replacement would increase the federal budget deficit.

According to a fact sheet provided by Paul there would be a number of other changes to the healthcare market. Here are the highlights:

  • Allow insurance companies to sell plans “across state lines”: This is a popular Republican idea, but was also included in a more limited form in the ACA. While each insurance company currently has to comply with state insurance regulators, Paul’s plan would eliminate this need for compliance. Health policy analysts have said there is little evidence that insurers would take advantage of this provision or that it would drive down costs.
  • Allow HSAs to be used without a high deductible plan: Currently, HSAs are only used in conjunction with high deductible plans. Paul’s bill would eliminate the link between the two. Additionally, it would allow HSA money to be spent on insurance premiums and prescription drugs.
  • Allow individuals and small businesses to pool together to get insurance: While the ACA allows for small businesses to pool together to get more favourable care, this has not been used much. In addition, Paul’s plan would allow individuals to pool together to access care, another long-time Republican idea.

This is the second replacement bill to be advanced in the past week by Republicans after a bill from Sen. Bill Cassidy and Susan Collins. Paul’s bill, however, eliminates many more of the ACA’s programs and protections than the Cassidy-Collins bill.

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