Monday, March 24, 2014

Correcting A Colossal Blunder

Mendacious assertions to the contrary by Democrats and their media flacks, there is no shortage of conservative ideas to replace Obamacare. In a recent NRO post, Jeffrey Anderson summarized one of these. The plan's key feature is a tax credit for all Americans to purchase a health insurance policy of their choosing.

The 2017 Project has advanced a conservative alternative to Obamacare under which health costs would drop, liberty would be secured, and every American who wants to buy health insurance would be able to do so. It’s an alternative that is designed to bring about Obamacare’s full repeal.
The plan would offer a refundable tax credit to Americans who buy health insurance in the individual market — an approach that Senator Jim DeMint wisely advocated as far back as 2009 — thereby finally ending the unfairness in the tax code (which allows employer plans to be purchased with pre-tax dollars but offers nothing to millions of people who shop in the individual market). The value of the credit would be as follows: $1,200 for those under 35 years of age; $2,100 for those between 35 and 50; $3,000 for those who are 50 or over; and $900 per child. According to the federal government's own numbers on health insurance shortly before Obamacare went into effect, credits of these amounts, supplemented by no more than $15 a month from a person’s own income, would cover the cost of “catastrophic” health insurance for a typical healthy person in all but five states. Those five states — all in the Northeast — have ruined their insurance markets through hyper-regulation, but the proposal would allow their residents to buy insurance across state lines and thereby escape these artificially inflated prices. And for those with an expensive preexisting condition, the proposal would guarantee coverage — at a price that, while higher, would still be affordable — through a state-run high-risk pool, from which no one could be turned away. (States would establish eligibility rules and pricing for the high-risk pools in such a way as to ensure affordability across incomes.)
If Republicans were to advance such an alternative, which would save over $1 trillion in direct spending as compared with Obamacare over a decade, they could repeal every last letter of Obama’s attempted overhaul of American medicine — thereby undoing its unprecedented consolidation and centralization of power and money at the expense of Americans’ liberty.

The 2017 Project website more fully describes the proposal, including its advantages over the ACA. Example :

Contrast this $15-a-month-or-less cost with Obamacare.  Under Obamacare, the typical person who makes $40,000 a year cannot get health insurance for ten times that price.  That bears repeating:  he or she cannot get health insurance for ten times that price.  According to a 2017 Project study that examined the 50 largest counties in the United States, the median amount that a 26-year-old who makes $40,000 has to pay per month for Obamacare’s cheapest “bronze” (lowest tier) plan is $159.  (Despite Obamacare’s extravagant cost, such a person isn’t eligible for a taxpayer-funded subsidy—being too young and too middle class.)  At that same $40,000 level of income, the typical 36-year-old has to pay $191 a month, the typical 46-year-old has to pay $202 a month, and the typical 56-year-old—the only person on this list who gets a taxpayer-funded subsidy—has to pay $193 a month (post-subsidy).
In each instance, that’s a far cry from paying no more than $15 a month—a ten-fold difference.  For the typical American shopping in the individual market, there would be no comparison between how affordable health insurance would be under this proposal and under Obamacare.

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