The Road to Repeal
May 26, 2014, Vol. 19, No. 35 • By JEFFREY H. ANDERSON
At great expense and at great disturbance to people’s existing doctor-patient relationships, Obamacare has managed to increase the number of people with health insurance. True, many if not most of those people were merely dumped into a failing Medicaid program at taxpayer expense, and many if not most of the rest were coerced into buying mandatory Obamacare-compliant insurance against their will. Still, millions of additional people are now insured, millions more will become insured by January 2017, and Republicans are going to have to make clear that those millions would continue to have access to insurance under a conservative alternative. At the same time, such an alternative should not cause turmoil by changing the tax treatment of health insurance for most people in the employer-based insurance market. A conservative alternative that enables anyone who is insured to remain so and anyone who wants to become insured to become so, and which doesn’t disrupt the typical American’s employer-sponsored insurance, would be a political and policy winner, and would enable the repeal of one of the worst pieces of legislation in American history.
The 2017 Project has advanced one such alternative. It would not allow people to be kicked off, or charged higher premiums for, their existing insurance—including insurance bought through the Obamacare exchanges—because of preexisting conditions. It would end the unfairness in the tax code by offering refundable, non-income-based tax credits to anyone who buys insurance in the individual market. These tax credits ($1,200 for those under 35 years of age, $2,100 for those between 35 and 49, and $3,000 for those 50 and over—plus $900 per child) would enable people to buy insurance even if they supplemented the credit with no more than $15 a month of their own money, according to the federal government’s own figures on the price of insurance on the eve of Obamacare. These credits would do so, that is, except in five liberal Northeastern states that have ruined their insurance markets through hyper-regulation—but people who live in those states could escape by buying across state lines. Those with expensive pre-existing conditions would be able to get insurance through federally funded, state-run high-risk pools, from which no one could be turned away or charged a premium he or she couldn’t afford. To further equalize the tax treatment of the employer and individual markets, the tax exclusion for employer-sponsored insurance would be capped at $20,000 for a family plan, far above the level at which the typical American would be affected at all. (Even those with premiums over $20,000 would still get the full tax break on that first $20,000.) Moreover, all of this would cost about half what Obamacare would cost—and much of that “cost” would come in the form of an overdue tax cut for middle-class Americans—saving taxpayers about $1 trillion over a decade.
Such an alternative would pave the way to full repeal. Without such an alternative, however, Obamacare will almost surely survive—for when one political party offers something and the other offers nothing, Americans almost always choose something. So the real question worth asking is not whether Obamacare can be repealed, but this: Are Republicans serious enough about repeal to advance a winning alternative that can make repeal a reality?
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