And the GOP's best alternative shows that simplicity is a virtue.12:18 PM, May 29, 2015 • By BRIAN BLAKE
In their review of House Budget Committee chairman Tom Price’s newly released Obamacare alternative, Bloomberg’s editors strain to make a virtue out of Obamacare’s maddening complexity. Whereas no one knows until tax time the following year what, if anything, they will be getting in subsidies under Obamacare, Price’s alternative offers tax credits in three simple amounts. It also lets Americans quickly see what they will be getting immediately, and does not compel them to buy health insurance against their will. Bloomberg’s editors object to such refreshing simplicity, writing, “The reason Obamacare subsidies are complicated is so people can get affordable coverage, whatever their age, at the lowest government cost. Because premiums vary enormously — by age, type of coverage and geography — that necessarily entails something more complex and flexible than three numbers set by Congress.”
These “three numbers” refer to the value of Price’s non-income-tested, refundable tax credits for those who purchase health insurance on the private market. Those aged 18 to 34 years old would receive a tax credit worth $1,200; those 35 to 49 years old would receive $2,100; and those 50 to 64 would receive $3,000. Parents, meanwhile, would get a $900 tax credit for each child.These tax credits would bring more equality to the tax code without upsetting the health care of the 169 million Americans who receive employer-based coverage.
Here’s a specific example of how Price’s plan would work: A 34-year-old single woman making $50,000 a year is paying a 25% marginal tax rate (assuming she does not itemize). With an employer-provided health-care plan valued at $5,000, she therefore gets an income-tax break of $1250. Under Obamacare, if she buys a $5,000 plan on the private market, she gets nothing—no tax break and no subsidy since she is too young and too wealthy under Obamacare’s byzantine formula. But under the Price proposal, she would receive a $1200 tax cut in the form of a tax credit to buy the insurance of her choice, bringing her into near-tax-parity with a similar person getting employer-based coverage.
Contrary to Bloomberg’s argument, the Price bill’s simplicity is not a flaw; it’s a feature. To illustrate how well Obamacare’s maddening complexity works, let us take the case of a couple, each partner aged 52 years old, living in Milwaukee and making $62,900 a year. Under Obamacare, this couple receives $6,200 a year in subsidies that go directly to their health insurer to help pay for their coverage. It is money they never actually see, but whether they know it or not, they could be on the hook for it. Because Obamacare’s formula has income cliffs built in that create huge disincentives to work, this couple will lose all of their $6,200 in Obamacare subsidies if their income increases $100 to $63,000 a year. Think of the predicament facing that couple when they realize they need to stop working in the final weeks of December to make sure they do not have to pay the government back $6,200 come tax time. And if they don’t realize it (as Bloomberg admits was the case for two thirds of Americans receiving subsidies last year, citing an H&R Block report) they will have even more complicated decisions to make on April 15th as they try to figure out how to pay back the $6,200 they just learned that they owe Uncle Sam, courtesy of Obamacare.
Under the simplicity of the Price legislation, which already has 67 House cosponsors, the same couple would receive $6,000 in tax credits without the year-end fear of stepping out of their government-created income box. Unlike under Obamacare, they could use their $6,000 tax credit on health coverage tailored to their specific health needs, rather than having to buy Obamacare’s mandated coverage of items irrelevant to these 52-year-olds’ lives, like pediatric dental care and prenatal care. Obamacare’s approach to health care is akin to this childless couple going into a car dealership and being told they have to buy a fully loaded luxury SUV with preinstalled car seats and Frozen playing on a loop on the backseat entertainment system. Price’s approach would let them pick the car they really want. And if they bought insurance for less than $6,000, they could put their savings in a health savings account, which they could not do under Obamacare.
3:50 PM, Apr 15, 2015 • By ETHAN EPSTEIN
The Daily Beast’s Michael Tomasky is celebrating this April 15 by declaring that America is “the most undertaxed advanced country in the world.” He claims that this chart offers proof of his assertion.
2:45 PM, Feb 19, 2015 • By GEOFFREY NORMAN
Peter Sullivan’s story in The Hill comes with this headline:
Dems gloat over ObamaCare numbers
There were more signups, it seems, than had been anticipated so no fleas on this dog. As
12:28 PM, Feb 10, 2015 • By MARK HEMINGWAY
The Supreme Court is about to hear King v. Burwell, a case that threatens to seriously undermine Obamacare. As the plaintiffs of the case have pointed out, the text of the law doesn't allow the federal government to provide health insurance subsidies to people who purchase insurance through the federal exchange.
8:35 AM, Feb 2, 2015 • By JERYL BIER
Along with the individual mandate to buy insurance, the employer mandate has been one of the more controversial aspects of Obamacare. Implementation of the employer mandate has been delayed twice, and other aspects of the law are being phased in, with "transitional relief" to help businesses cope. However, according to Healthcare.gov, an employer "mandate" doesn't even exist.
The pen is mightier than the Freud.Jul 28, 2014, Vol. 19, No. 43 • By P.J. O'ROURKE
To what will Obamacare lead? If the administration’s health policies continue on their present trajectory, Obamacare will lead to some form of European-style single-payer national health system.
Hosted by Michael Graham.4:50 PM, Jan 28, 2014 • By TWS PODCAST
The WEEKLY STANDARD podcast, with the 2017 Project's executive director Jeffrey Anderson, on the GOP's new Obamacare repeal and replace alternative.
How to get health insurance while avoiding the exchanges.Dec 30, 2013, Vol. 19, No. 16 • By JEFFREY H. ANDERSON and SPENCER COWAN
At least they have their health. When it comes to purchasing insurance through the Obamacare exchanges, young adults don’t have much else going for them.
Obama’s deceptive budget. Apr 29, 2013, Vol. 18, No. 31 • By JAY COST
Earlier this month, President Obama released his fiscal year 2014 budget, which calls for $1.1 trillion in higher taxes over the next decade, cuts of $400 billion from Medicare and Medicaid, and alterations to Social Security’s benefit rate worth about $130 billion.
Revisited. Mar 25, 2013, Vol. 18, No. 27 • By TONY MECIA
With Obama-care poised to kick in to high gear next year, Dr. Brian Forrest routinely hears skeptics ask if the new laws and regulations will stifle his innovative primary care practice outside Raleigh, N.C.
Disenchantment sets in. Mar 25, 2013, Vol. 18, No. 27 • By MARK HEMINGWAY
"I heard [Obama] say, ‘If you like your health plan, you can keep it,’ ” John Wilhelm, chairman of Unite Here Health, representing 260,000 union workers, recently told the Wall Street Journal. “If I’m wrong, and the president does not intend to keep his word, I would have severe second thoughts about the law.” Besides Wilhelm, some of the nation’s largest union bosses have taken to publicly criticizing the Affordable Care Act.
. . . to ‘free money’ for Medicaid expansion.
Dec 24, 2012, Vol. 18, No. 15 • By ANDREW B. WILSON
If someone who is sinking deeper and deeper into debt comes to you with an offer of “free money,” you would be best advised to:
(a) take the money and run,
First, do no harm—and then repeal Obamacare.Sep 3, 2012, Vol. 17, No. 47 • By WILLIAM ANDERSON
Thirteen years ago I co-authored a book that I thought could cut the Gordian knot of the health care dilemma. The dozens of copies sold proved insufficient to promote the needed revolutionary change. John C. Goodman has now written the book that can do the job. He presents as clear an answer as we are ever likely to see, along with examples from the real world. It’s now our job to make the case in a politically effective way.