U.S. Sen. Rand Paul, R-Kentucky, has added an Affordable Care Act replacement bill to the growing list of Republican plans being introduced to repeal and replace the law.
Paul said his bill protects consumers with pre-existing conditions by providing a two-year open-enrollment period for these individuals to obtain coverage.
It restores HIPAA pre-existing conditions protections that were in effect within the group market prior to Obamacare, Paul said.
As does a recent proposal by GOP Sens. Susan Collins and Bill Cassidy, Paul's Obamacare Replacement Act promotes health savings accounts as a method for consumers to pay for services.
Unlike the Patient Freedom Act unveiled by Collins and Cassidy last week, Paul's plan does not retain the ACA for the states that want to keep it.
Paul's bill gives consumers incentives to save money in health savings accounts by authorizing a tax credit of up to $5,000 per taxpayer for individuals and families. The cost of health insurance may be deducted from income and payroll taxes.
By providing a universal deduction on both income and payroll taxes regardless of how an individual obtains their health insurance, Americans will be able to purchase insurance independent of employment, Paul said. But the provision does not interfere with employer provided coverage, he said.
To offset bad debt for physicians, the bill amends the Internal Revenue Code to allow a physician a tax deduction equal to the amount he or she would otherwise charge for charity medical care or uncompensated care, limited to 10 percent of a physician's gross income for the taxable year, according to the plan.
[Also: Senators Collins, Cassidy pitch state-based ACA replacement plan]
It amends the definition of health insurance coverage to clarify that stop-loss insurance is not health insurance. Medical stop-loss insurance gives employers who self-fund their employee benefit plans protection against catastrophic or unpredicted losses, so that they don't assume total liability.
This bill's provision is designed to prevent the federal government from using rulemaking to restrict the availability of stop-loss insurance, according to the plan.
Enactment of the bill repeals the individual and employer mandates, community rating restrictions, rate review, essential health benefits requirement, medical loss ratio and other insurance mandates, Paul said.
It removes the annual cap on HSA contributions and broadens the use of the funds. HSA funds may be used to purchase insurance, cover premiums and afford a broader range of health-related expenses including prescription and over-the-counter drugs, dietary supplements, nutrition, along with physical exercise expenses and direct primary care, according to the plan.
Consumers would be able to buy insurance across state lines through an interstate market that allows insurers who are licensed to sell policies in one state to sell to residents in another state.
Individuals and small business owners would be able to join together in association health plans to gain the leverage of being part of a large insurance pool, he said.
It enables states to use Medicaid waivers to create state plan designs.
"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 Paul, a physician, who has been among Republicans to support a replacement to Obamacare at the time of repeal.
Twitter: @SusanJMorse