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Three Criteria for Health Reform

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Republicans have a historic opportunity to follow through on our promise to repeal ObamaCare. The recent elections that focused on the law’s repeal—2010, 2014 and 2016—were massive GOP victories. The American people gave our party unified control of the federal government, and a mandate for meaningful change.

After years of talk, we know that the Republican repeal-and-replace effort will soon be judged by three criteria: Does it make health care more affordable? Does it give consumers more choices? Does it provide Americans more control over their families’ health care?

As of now, the House’s bill neither fully repeals ObamaCare nor passes these three tests. Yet there’s a path forward—if the administration and Republicans from across the political spectrum can put aside past differences to find consensus. Here is how we propose the House and Senate come together to do just that:

First, we must lower insurance premiums. Nothing matters more. The current House bill would not achieve this, because it doesn’t repeal all of ObamaCare’s insurance mandates. Of the few it addresses, the bill delays their repeal. We must abolish ObamaCare’s mandates immediately; Americans need relief from higher premiums and cannot wait until 2020 or beyond.

The single biggest factor causing frustration with ObamaCare is skyrocketing costs. The average family’s annual premiums on employer-sponsored plans under the law have increased by more than $5,000. The insurance mandates are a primary driver of these spikes. If we leave these mandates in place or delay their repeal, premiums will remain too high for too long, as studies by the Congressional Budget Office and others have shown. If premiums continue to skyrocket, we will have failed, and Americans will rightly direct their frustration at the ballot box toward the Republican majority.

We cannot give voters a procedural excuse for why we couldn’t get the job done. Some have argued, incorrectly, that the Senate’s Byrd Rule precludes repealing these insurance mandates through the reconciliation process. That simply isn’t true. The current version of the bill already repeals or modifies a few of the mandates. Why wouldn’t we repeal all the major insurance mandates for the sake of truly lower health-care costs? How can modifying a mandate comply with Byrd, but repealing it not comply? Both have billions in budgetary effect, the central prerequisite for reconciliation.

We should follow the text of the Budget Act, which establishes the reconciliation process. Fully repealing the insurance mandates would comply with both the letter and the spirit of the statute. More important, the Senate parliamentarian does not ultimately determine what is allowable under reconciliation. That authority falls to the Senate and the vice president, the chamber’s presiding officer. As the former Senate parliamentarian Robert Dove once explained, the vice president is “the ultimate decider” on reconciliation: “The parliamentarian only can advise. It is the vice president who rules.”

To further lower premiums, we should allow families to pay for health insurance from expanded health savings accounts. Allowing premium payments from HSAs would reduce costs, provide greater parity between employer and individual coverage, and encourage insurance portability, which also directly addresses concerns related to pre-existing conditions.

We should also include in the reconciliation bill additional reforms that will drive down costs: Consumers should be enabled to purchase insurance plans across state lines to create a true 50-state marketplace. Small businesses should be allowed to pool together in association plans to get better rates for their employees.

Second, we shouldn’t replace ObamaCare’s subsidies with yet another health-care entitlement. Instead, we should implement nonrefundable tax credits, which can be deducted from payroll taxes for lower earners. Anyone who gets a paycheck has a large amount withheld by payroll taxes. Thus, this nonrefundable credit would benefit lower-income individuals by letting them keep more of what they earn.

Third, ObamaCare’s Medicaid expansion should be immediately frozen and then phased out over time. A freeze wouldn’t take away coverage from any person currently enrolled—it wouldn’t pull the rug out from anybody—but it would prevent states from adding more enrollees to the expansion population, which the federal government would be responsible for funding.

During the phaseout, we should implement work requirements for healthy working-age adults in the Medicaid expansion population. ObamaCare overextended Medicaid beyond those people that the program was intended to serve—the disabled elderly, pregnant women and needy children. Too often now, these people and their families have been forced onto waiting lists while money has poured into the expansion population. Freezing ObamaCare’s expansion immediately will stop this misdirection of the Medicaid program without taking away anyone’s coverage.

We should also implement true Medicaid block grants to the states. Republicans understand that in its current form, Medicaid does not work well. Much of the dysfunction is the result of one-size-fits-all federal rules that are forced on every state. Instead of per capita caps with federal strings still attached, we should allow states to innovate to help produce better health results. That’s why the reconciliation bill should include true block grants for Medicaid funding, which actually would allow states to transform their Medicaid programs and better serve vulnerable populations, without having to ask “Mother, may I” of the federal government.

In any case, a comprehensive plan to reform Medicaid must restrain the program’s growth rate if it is to be fiscally responsible in the long term and not allow for out-of-control spending.

Republicans have pledged for six years to repeal ObamaCare and return choice to America’s health-care system. The time to act is now upon us. If Republicans join together with united purpose and tackle these areas of concern, we will have finally delivered on our promise.

Mr. Cruz, a Texas Republican, is a U.S. senator. Mr. Meadows, a North Carolina Republican, is chairman of the House Freedom Caucus.

Source: Ted Cruz and Mark Meadows, wsj.com