Some GOP want tax credits in health alternative

WASHINGTON -- A small, influential group of Republicans, in search of a replacement health-care law, will propose tax credits to help lower-income individuals and families purchase insurance, officials said Wednesday.

The GOP lawmakers would jettison the controversial coverage requirement in the current "Obamacare" law.

The proposal is part of an outline Sen. Orrin Hatch, Sen. Richard Burr and Rep. Fred Upton plan to make public today. It's an early marker among the competing recommendations likely to be floated in advance of an expected Supreme Court ruling in June on the constitutionality of a key part of President Barack Obama's health insurance overhaul.

Hatch, from Utah, is chairman of the Senate Finance Committee, which has jurisdiction over much of the current law. Burr, from North Carolina, is a member of the panel. Upton, a Michigan lawmaker, chairs the House Committee on Energy and Commerce, which has significant authority over the law in that chamber.

Aides to all three lawmakers declined to comment. Upton also declined to provide any details of the plan, but he said Tuesday the effort is aimed at "being prepared to talk about something we could support" if the court strikes down a part of the law that provides subsidies for millions who buy coverage under the current arrangement.

Like other alternatives expected to follow, the starting point for the three lawmakers is repeal of the current law, which Republicans voted against unanimously when it passed in 2010 and have tried repeatedly to uproot since then.

Officials familiar with the emerging proposal said it is based in large part on an outline that Hatch, Burr and former senator Tom Coburn of Oklahoma outlined a year ago. These officials spoke on condition of anonymity because they were not authorized to speak on the record before a formal announcement.

By repealing Obama's health-care law, the plan would eliminate the government requirement for individuals to purchase coverage and the penalty for noncompliance and get rid of a companion mandate for businesses to provide coverage for their workforce. It is expected to scrap a requirement for all plans to provide insurance in specific areas, including inpatient settings, hospitalization, maternal and newborn coverage, pediatric care and more.

The plan will call for tax credits to individuals and families up to 300 percent of the poverty line to encourage them to buy coverage.

For a family of four, that translates to annual income of up to $71,400, according to the Department of Health and Human Services website.

To help finance the program, Hatch, Burr and Upton are expected to recommend taxing the value of health insurance plans above $30,000 a year as regular income, the officials added.

The issue of a possible replacement measure arose at a Senate hearing during the day, when Republicans pressed Health and Human Services Secretary Sylvia M. Burwell to describe the administration's plans in case the court strikes down part of the law. She said she was focused on enforcing the law instead.

Republicans first promised to repeal and replace Obamacare in the 2010 political campaign, but they have yet to submit replacement measures.

In their proposal of a year ago, Hatch, Burr and Coburn proposed retaining a politically popular requirement in the current law that bans insurance companies from imposing caps on lifetime benefit limits. That is expected to be repeated in the revised recommendations, officials said.

As was the case a year ago, the proposal would require insurance companies to permit children up to the age of 26 to remain on their parents' plans, although individual states could opt out of that rule.

Officials also said the alternative will include permission for insurers to sell plans across state lines as we as steps to limit the size of monetary damages that can be awarded in medical malpractice suits. Republicans say both provisions would hold down the cost of health care.

In addition to Hatch, Burr and Upton, at least two other Republican groups are studying possible replacement legislation.

Republican senators led by Sens. John Barrasso of Wyoming, Lamar Alexander of Tennessee and Hatch are also studying the issue in anticipation of a court ruling.

The House voted Tuesday to require Upton and other committee chairmen to propose alternatives.

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