Senator Rand Paul (R-KY) released his comprehensive plan to replace Obamacare on Wednesday, which is oddly enough named “The Obamacare Replacement Act” (S.222).
If Paul’s plan is passed into law, it might be the relief millennials need.
One of the key highlights to Paul’s plan is repealing the “individual and employer mandates, community rating restrictions, rate review, essential health benefits requirement, medical loss ratio, and other insurance mandates.”
For all millennials not covered by their parents’ plans, Obamacare’s individual mandate required them to purchase insurance either through their employer or through the federal or state exchanges.
Not only would a repeal of the individual mandate be a boon for millennials, but so will the repeal of the employer mandate. Currently, the employer mandate requires business owners to provide health insurance if they staff more than 50 full-time employees. This would give employers who are trying to stay afloat more leeway in terms of hiring young people for full-time positions as they were previously working part-time to avoid the employer mandate. This would also raise their status above underemployment.
Paul’s plan also includes provisions that would expand the use of Health Savings Accounts (HSA) in which individuals can receive a tax credit up to $5,000 for contributions. Additionally, his replacement plan would remove HSA caps so that individuals can continue to contribute to their HSAs. Since young people more often than not engage in physical activities, under the new plan, individuals can use their HSAs to purchase exercise equipment, health coaching, and even nutritional or dietary supplements for weight loss.
Not only would Paul’s plan remove the interstate market barrier that would allow insurance companies to compete state-to-state, but he would include Independent Health Pools (IHPs). This would allow groups of people to pool together to purchase insurance and thus lower the cost of the premium per insured.
Of course, many Obamacare supporters are worried that repealing and replacing the Affordable Care Act would undo the protections that insureds had with pre-existing conditions. However, Paul’s plan “provides a two-year open-enrollment period under which individuals with pre-existing conditions can obtain coverage.”
At the moment, the Senator’s plan is testing the waters to gauge support with his Republican and Democrat colleagues. But if his plan gains traction, millennials should stand with Rand.