State could allow Wisconsinites receiving subsidies to buy individual insurance policies not offered on Obamacare exchanges, with no penalty on individuals who cannot find a good plan

WASHINGTON — Sen. Ron Johnson (R-Wis.) joined Sen. Lamar Alexander (R-Tenn.) and six other colleagues Wednesday in introducing the State Flexibility to Provide Affordable Health Options Act, legislation that would give states the ability to help their residents who are faced with significant premium increases and limited options on Obamacare exchanges.

“I have worked for years to limit the damage and harm done to real people by Obamacare, a partisan policy that promised marketplace competition and higher quality health plans at lower costs and instead delivered the exact opposite,” Sen. Johnson said. “This bill would provide necessary relief to Wisconsinites who, under Obamacare, would be penalized for not purchasing a product that they cannot afford or does not meet their needs. It will allow the state to provide Wisconsinites receiving subsidies more options than just those offered on the Obamacare exchanges for 2017.”

While this bill would only apply for plan year 2017 as a temporary step while work continues on efforts to repeal and replace Obamacare with more successful reforms, it would be a significant step to free Americans who are currently suffering the serious negative consequences of Obamacare. It would give states with failing Obamacare exchanges the authority to allow residents to purchase plans outside of the exchanges, even with subsidies. Residents in states that elect to do so will not be subject to the individual mandate.  

Projections for 2017 include premiums rising by double-digit percentages and more limited options under Obamacare. Over 30 percent of U.S. counties are expected to have just one insurer offering plans on Obamacare exchanges; four counties in Wisconsin are expected to only have one insurer, according to the Kaiser Family Foundation. Despite increasing costs and decreasing competition, Americans and Wisconsinites are being forced either to purchase a product that they do not want and cannot afford to use — or to face a tax penalty.

The legislation, introduced by Sens. Ron Johnson, Lamar Alexander (R-Tenn.), Kelly Ayotte (R-N.H.), John Barrasso (R-Wyo.), Thad Cochran (R-Miss.), Mark Kirk (R-Ill.), David Perdue (R-Ga.), and Rob Portman (R-Ohio), would:

• Give states with a failing Obamacare exchange the authority to allow residents to use their Obamacare subsidy to purchase any health plan of their choice, even those off the exchange, for the 2017 plan year.
• If the state chooses to use this authority to allow residents to use subsidies outside of the exchange, the legislation will waive the Obamacare law’s requirement that you must buy a specific health care plan or pay a fine of as much as $2,000 for a family of four next year. 

A summary of the State Flexibility to Provide Affordable Health Options Act is available online HERE.
A copy of the legislation is available online HERE.