* Republicans pledge new health plan if Supreme Court acts
* New legislation could aid party's election year aims
* Aides see step-by-step approach on health issues
By David Morgan
WASHINGTON, April 22 (Reuters) - Republicans in Congress are getting ready to answer an election-year question that has dogged the party's campaign for months: How would it replace President Barack Obama's healthcare law if the measure is overturned or repealed?
House Republicans are working to create a legislative blueprint they can sell to voters after the Supreme Court rules on Obama's Patient Protection and Affordable Care Act, the nation's most sweeping healthcare legislation since Medicare and Medicaid in the 1960s.
Lawmakers and their aides say a Republican plan would focus on controlling healthcare costs and allowing people to retain coverage while changing jobs. They will avoid Obama's comprehensive approach to extend coverage to 32 million uninsured Americans.
The aim is to lay out a prospective agenda for the newly elected political leadership in 2013, based on a "step-by-step" approach consisting of separate bills that address specific problems within America's $2.6 billion healthcare system.
But if the high court justices struck down the entire law, Republicans could try to salvage some of the Affordable Care Act's provisions that are already in force and have proved popular with voters.
Representative Tom Price, an orthopedic surgeon who heads the House Republican Policy Committee, said stopgap legislation could be crafted for 2012 if the court ended health insurance safeguards for young adults and children with pre-existing medical conditions.
"That would present a significant void and vacuum in health policy," Price said. "There will be a need to have some things to fill that vacuum."
But a Senate Republican aide said there would be no need for Congress to act this year if necessary adjustments could be achieved by the administration alone or by industry.
"There's a lot of shadow-boxing going on," said one healthcare industry lobbyist.
Closed-door discussions have not yet turned to specific legislative options, w hich may be drawn from a swath of previously proposed Republican legislation. But some say a consensus between leaders and key committee chairmen could emerge as early as the May 28 Memorial Day holiday, weeks before a Supreme Court ruling widely anticipated for June.
"When the Supreme Court acts, we will be ready with plans that actually work to lower the cost of care and to help people keep the care they want," said Republican Senator John Barrasso, another orthopedic-surgeon-turned-legislator who is Price's policy counterpart in the Senate.
A DEMOCRATIC PLAN, EVENTUALLY
The Affordable Care Act , Obama's signature domestic achievement, introduces new consumer protections and encourages market innovations intended to improve the quality of care while eventually lowering costs.
But 26 states and an independent business group asked the Supreme Court to overturn the law on grounds that it exceeded the federal government's constitutional authority by requiring most Americans to buy health insurance and imposing a dramatic expansion of the federal-state Medicaid program for the poor.
The court's impending decision, which would land in the middle of the 2012 campaign battle for control the White House and Congress, could strike down all or part of Obama's reform act, or leave the two-year old package in place.
Whatever the outcome, the decision is expected to kick off an aggressive new chapter in the election campaign that will spotlight healthcare far more prominently, according to analysts and lobbyists.
There has been no word on whether House Republicans are consulting with the party's presumptive presidential nominee Mitt Romney, who has proposed his own set of market-oriented healthcare reforms and has vowed to kill Obama's healthcare law.
Up to now, Republicans on the campaign trail have chiefly attacked "Obamacare" and vowed to repeal it, leaving them vulnerable to charges the party has no credible reform plan of its own.
"They need something positive. 'Repeal' alone is negative, and people want consequential health reform that solves real problems that are facing them," said Robert Moffitt of the Heritage Foundation, a conservative think tank that has contributed reform ideas to both sides of the partisan aisle.
Moffitt and James Capretta of the conservative American Enterprise Institute advocate an approach they say would make consumers more cost-conscious.
It would move away from the current tax break for employer-sponsored healthcare, in exchange for fixed tax credits that would help cover the cost of individual plans sold in a competitive marketplace. Consumers would have to bear any cost over the fixed tax credits.
In an article titled "How to Replace Obamacare," in the current edition of the quarterly journal National Affairs, the two analysts also call for changing existing laws to protect people with pre-existing conditions and adopting policies that would better encourage reform initiatives at the state level.
Similar ideas and others have been circulating for years in Republican legislative proposals that have never become law.
Some call for insurance reforms allowing individuals to buy insurance from other states or for letting small businesses, churches and civic organizations form new insurance pools.
Proposals also would protect doctors and other healthcare providers from malpractice suits and convert Medicare into a program that provides vouchers to help the elderly and disabled meet the cost of purchasing private insurance.
But some of those ideas have been found wanting in the past.
In 2009, the nonpartisan Congressional Budget Office examined a Republican proposal that sought to allow the interstate sale of insurance, imposed medical malpractice reforms and offered incentives for state-level reforms.
The CBO found the plan would cut the deficit by $68 billion over 10 years, extend coverage to only 3 million uninsured and raise insurance rates for some, including those less healthy.
By contrast, the CBO has said the Affordable Care Act would reduce the deficit by $132 billion through 2019.
The Obama administration is also showing signs of thinking about what to do if the Supreme Court's ruling proves unfavorable.
Officials still say they are confident the Affordable Care Act will be upheld and that their focus is on implementing its provisions. But references to "a plan" have begun to emerge in recent comments by the White House and the Department of Health and Human Services.
"We will eventually, I'm sure, have a plan. But that really isn't where all the time and energy is focused right now," Health and Human Services Secretary Kathleen Sebelius told Reuters after a recent speaking engagement. (Additional reporting by Thomas Ferraro; Editing by Michele Gershberg and Peter Cooney)