The single most politically litigated topic in the United States in a generation has been Obamacare. In election after election, including two of my own in 2010 and 2016, the American people repeatedly put into office men and women who promised them relief from this law.
The reason is simple: The foundation of Obamacare, a dramatically enhanced federal role in health insurance, has failed to deliver on the promises of its architects.
Millions, who liked their plans and their doctors, couldn't keep them. Increasingly, parts of the country have no Obamacare-compliant plans for sale.
Costs have skyrocketed. In Pennsylvania, premiums are up 120 percent since 2013. Competition is almost nonexistent; 40 percent of our residents can choose from only one insurance provider on the exchange.
Coverage is far below the forecasts touted by the law's advocates. The Congressional Budget Office's initial prediction for participation in the exchange was off by over half for this year—a difference of 13 million people.
These dismal results, accompanied by almost $2 trillion in new federal spending and $1 trillion in new taxes, are set to continue and grow worse unless Congress takes action.
Republicans have begun the process to roll back this misguided experiment, and the first step is to address the most immediate challenges presented by Obamacare's collapse.
The Senate draft proposal will not affect that vast majority of Pennsylvania families who receive their coverage through an employer, Medicare, or the Children's Health Insurance Program. However, the individual market, with just over 400,000 participants in Pennsylvania, is in dire need of relief.
In the short run, the Senate proposal will stabilize this market by continuing Obamacare subsidies for all eligible Americans of modest incomes, and subsidizing high-cost enrollees via a new stabilization fund. Insurers will get some relief from Obamacare regulations to help lower premiums. More broadly, the bill's tax credits, expansion of health savings accounts, repeal of Obamacare taxes, and restoration of state insurance oversight will help to drive down costs for everyone as we transition to a more consumer-driven market.
Despite inaccurate reports to the contrary, the Senate draft bill keeps Obamacare's expansion of Medicaid, the program for low-income Americans. Obamacare created a new category of eligibility: working age, able-bodied, childless adults. Under the Senate bill, both the 700,000 Pennsylvanians who signed up for this expansion and future expansion enrollees will retain their federal eligibility for the program. In fact, the federal government will pay at least 90 percent of their costs through 2020, with states paying the balance. Then, over a four-year phase-in period, states wishing to cover this new category of recipients will be required to pay their fair share — only 48 percent in Pennsylvania — for the Medicaid expansion. This is the same amount states currently pay for every traditional Medicaid category: the aged, disabled, children, and families.
Perhaps most important, for the first time in its history, the Medicaid program will be reformed so it is sustainable for future generations and for taxpayers. For decades, Medicaid spending growth has been out of control. It is now a major driver of our federal deficits and debt. Obamacare exacerbated it by adding millions to the rolls without any reform. Our bill will begin, eight years from now, to transition from this uncontrolled, unsustainable spending growth to a slightly slower, hopefully manageable, rate of growth.
In the coming days, this proposal will be studied by the Congressional Budget Office, health-care experts, patient advocacy groups, hospitals, physicians, business associations, and individual constituents. There will be praise, criticism, debate, and suggestions on how to improve this bill. My staff and I will thoroughly examine this legislation and are open to the ideas of anyone who hopes to improve it. Additionally, this legislation will be subject to unlimited amendments.
I pledged to the people of Pennsylvania that I would work tirelessly to replace Obamacare with a more stable, affordable health-care system that puts families in charge of their health-care decisions. I also promised voters to put our entitlement programs on a sustainable fiscal path. This legislation is an important step toward those goals, saving countless Pennsylvanians from the collapse of Obamacare, reducing the federal deficit, and preserving an important safety net for future generations.
Pat Toomey is a Republican U.S. senator from Pennsylvania. @SenToomey