Issa bill to replace Obamacare doesn’t address subsidies

Feb. 22--Under pressure from constituents in and outside of his congressional district, Rep. Darrell Issa of Vista on Tuesday released a draft bill that would repeal and replace Obamacare.

Titled the "Access to Insurance for All Americans Act," it is the first measure that suggests all Americans should be allowed to enroll in the Federal Employees Health Benefits Program, a system that offers access to hundreds of health plans for more than 8 million federal employees, retirees and their dependents.

Issa has brought up the idea in health-care debates since at least 2009, and he cast the plan in a bipartisan light Tuesday morning while addressing supporters and protesters outside his Vista office.

"It's not Republican legislation. It's not Democratic legislation. It's legislation I've been pushing to make sure we have access to affordable care," Issa said.

According to the Kaiser Family Foundation, the bill is the fifth repeal-and-replace proposal from a Republican congressional leader. Like most of the others, it proposes keeping certain popular Obamacare provisions such as allowing adult children to stay on their parents' plans until age 26. But where other Republican leaders would require people with pre-existing medical conditions to enroll in special high-risk insurance pools, Issa's plan would extends full coverage, often called "guaranteed issue," to all enrollees -- which is the case for federal employees.

His 10-page bill calls for repeal of the Affordable Care Act after a two-year adjustment period and does not maintain the subsidies that currently defray health insurance premiums by significant amounts for millions of Americans. It also does not explicitly continue the flow of federal cash that has allowed expansion of Medicaid programs in many states, including California.

Several other Republican lawmakers' proposals would explicitly maintain premium subsidies and money for Medicaid expansion in one form or another, though most of those measures would not give as much funding as Obamacare.

While granting access to the same plans that federal employees enjoy would surely be a positive development, doing so without subsidies would leave many current Obamacare enrollees unable to afford their premiums, said Timothy Jost, a health policy expert and an emeritus professor at the Washington and Lee University School of Law.

The text of Issa's draft bill does specifically allow enrollees to deduct the total cost of their yearly health insurance premiums against their personal income taxes. But Richard Kronick, a health policy professor at UC San Diego who has worked with the U.S. Department of Health and Human Services, said deductions are most useful to people who make enough money to land in high tax brackets. Most Americans who currently get Obamacare subsidies are many rungs further down on the economic ladder, he noted.

"Deductions would not make coverage affordable to most of the people who are currently buying coverage with subsidies ...," Kronick said.

Of course, federal employees are not paying the full cost of their coverage, either.

Jost and Kronick said like most private companies, the government covers the majority of its employees' premiums for plans purchased through the federal benefits program. A year-old report from the Congressional Research Service found that at least 72 percent of the insurance tab for federal workers is covered by the employer, an amount roughly in line with what private companies kick in, Kronick said.

Issa was asked about subsidies during the discussion in front of his office Tuesday. "My proposal is neutral to the question of subsidies," Issa said.

His staff did not respond Tuesday afternoon when asked for clarification of that comment.

Chris Van Gorder, chief executive of Scripps Health, reserved judgment on the draft bill. He said he appreciates that Issa is pitching a new plan before trying to repeal the Affordable Care Act.

"It's a start, but there are many details not covered in the outline, so it's almost impossible to give a detailed opinion on the proposal," Van Gorder said.

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