An Obamacare Replacement in the Senate – National Review
The senators’ proposal in some respects builds on ideas that have been in various Republican proposals before (including the American Health Care Reform Act, proposed last year and co-sponsored by a majority of House Republicans), but it goes further and probably amounts to the most promising conservative health reform we have yet seen from Republican politicians. Its basic structure involves a version of the combination of reforms that James Capretta (for instance in this National Affairs essay with Robert Moffit) has been laying out in some detail in recent years, and which other conservatives (including Ramesh Ponnuru and myself) have pointed to: It would repeal Obamacare and instead address the key particular deficiencies of our health-care system in a way that enables more Americans to be genuine consumers and that employs actual competition among insurers and providers (giving them real freedom to shape products and business models) to restrain costs while expanding coverage.
The proposal would extend a tax credit for the purchase of health insurance to all Americans below 300 percent of the poverty level who do not have health coverage from a large employer. That credit (paid for largely by capping the tax exclusion for employer-provided coverage), would provide all of these Americans with the same benefit now extended only to people with employer-based coverage. The credit would be age- and income-based, and intended to enable the people receiving it to afford at least catastrophic coverage, and to far more easily purchase more comprehensive coverage if they choose to. It is designed in a way that would extend the benefit now only available in the employer system without destabilizing the employer system (as some proposals to fully replace the employer exclusion would do) — which strikes me as both substantively and politically wise.
States would also be allowed, if they chose, to establish an opt-out auto-enrollment process for recipients of the credit. They could, for instance, automatically enroll any person who hasn’t already purchased insurance in a plan (chosen at random from such plans offered by insurers in the state) with a premium exactly equal to his tax credit, with insurers adjusting that person’s deductibles and co-payments accordingly. States would have a strong incentive to do this, since it would dramatically reduce the number of uninsured people in the state at no cost to the state or those individuals, and the cost to the federal taxpayer would only be the cost of the tax credit.
Wow.. what a novel idea to actually incentivize individuals to get health insurance instead of by decree.