Joseph Antos and James C. Capretta: Unpacking The Burr-Hatch-Upton Plan

Health Affairs Blog, March 24, 2015

Anticipating the upcoming Supreme Court decision on King v. Burwell, which could halt health insurance subsidies available through the federal exchange, Republican Senators Richard Burr and Orrin Hatch joined with Representative Fred Upton to propose a comprehensive replacement for the Affordable Care Act (ACA). The Patient Choice, Affordability, Responsibility, and Empowerment Act, or Patient CARE Act, is modeled on a proposal of the same name offered last year by Senators Burr, Hatch, and Tom Coburn, who has retired from the Senate. The Burr-Hatch-Upton plan, like its predecessor, adopts consumer-based reforms of the insurance market, modernizes the Medicaid program, and makes other changes intended to lower cost and increase choices.

In an earlier post, we described in detail the provisions of the Burr-Coburn-Hatch bill. In this post, we discuss how the Burr-Hatch-Upton plan differs from the earlier proposal. We also discuss the impact of the new proposal on health insurance coverage, premiums, and the federal budget based on a new analysis from the Center for Health and Economy (H&E), a non-partisan think tank focused on producing informative analyses of trends in U.S. health care policy and reform ideas. We conclude by commenting on the direction Republicans are likely to take in reforming the health system in the aftermath of a Supreme Court decision in the King v. Burwell case.

Major Provisions Of The Burr-Hatch-Upton Plan

The new version of the Patient CARE Act retains the major provisions of last year’s proposal. The plan would repeal the Affordable Care Act and put in its place a series of insurance market reforms intended to widen the range of health plan choices available to consumers. The ACA’s Medicare provisions would not be repealed in the Burr-Hatch-Upton proposal, although the authors make it clear they would pursue alternative Medicare reforms in separate legislation.

Insurance Market Reforms.  As with the previous proposal, the Patient CARE Act repeals the ACA’s individual mandate and replaces it with a framework under which no one can be denied coverage or charged higher premiums because of a pre-existing condition as long as they remain continuously enrolled in a health plan. Insurance regulation would be returned to the states, with the presumption that insurers will allow dependents age 26 and younger to enroll in their parent’s coverage. In addition, insurers would be permitted to charge their oldest enrollees no more the five times the premiums assessed to their youngest enrollees, replacing the ACA’s 3:1 rule. States would be free to establish their own insurance regulations that could differ from the federal rules.