Freedom Caucus endorses revised Obamacare replacement proposal

The House Freedom Caucus, which helped block Paul Ryan’s original Obamacare repeal and replacement legislation, has agreed to support a revised bill. The Washington Post describes, in general terms, the new approach.

If the new incarnation gains sufficient support from moderate House Republicans, it will pass. This might happen quickly.

For me, the key question in evaluating Obamacare replacement legislation is the impact on premiums. Not having studied the new version of repeal and replace, I have no opinion to offer as to its impact on premium prices or as to the overall merit of the proposal.

Daniel Horowitz, a forceful conservative critic of the original version, isn’t impressed by its successor. On the question of premium prices, he writes:

The key to any repeal bill is to actualize a dramatic drop in premiums and a surge in new insurers entering the market. A tenuous promise from HHS to offer some sort of relief [from the regulations that drive up premium prices and deter new entrants to the market] is too fragile for the market to respond with lower prices. And it certainly won’t bring new insurers into the market (or for those that left the individual market to reenter).

And even if these companies were certain that HHS Sec. Tom Price would waive the regulations for all or most of the states, that promise only lasts for the duration of this administration. Insurers won’t create a business model or start new companies based on a four-year promise that can (and most likely will) be reversed.

Although the bill guarantees a default approval if HHS fails to act on the request within 60 days, there is no mechanism, from my reading of the text, preventing HHS from actively rejecting a waiver, something that would clearly be done by the next secretary of HHS, who will likely be a Democrat, thanks to the GOP’s broken promises.

However, Horowitz views the new replacement legislation as an improvement over it predecessor. He hopes the Senate will make the legislation better still by “us[ing] the House bill as a floor, not a ceiling for repealing Obamacare.”

I’m not counting on it.

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