A Republican Replacement for Obamacare

Friday, 14 Feb 2014 04:20 PM

By Michael Reagan

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Harry Reid and Nancy Pelosi — the Scylla and Charybdis of government overreach and spending — are fond of taunting Republicans opposed to Obamacare. They ask, “Where is your plan to replace what we have?”
 
It’s a stupid question because when you’re removing a house that’s been condemned you don’t do so by carefully lowering a completed house to rest on top of the ruins. First you clear the site and start over from the foundation up.
 
But now The Weekly Standard has designed a plan to replace Obamacare that answers the Reid-Pelosi challenge without subjecting the nation to the 2,700 pages of subsidies, bailouts, carve-outs, backscratching, insider dealing, arrogance, and incompetence that defines the Obamacare disaster.
 
This plan “would solve the three core problems that called out for real reform even before the Democrats passed Obamacare: getting more people insured; dealing with the problem of pre-existing conditions; and lowering costs.”
 
First, the plan removes Reid’s so-called “job lock” — a previously undiscovered condition that encourages people to work. Individual Americans buying health insurance would now receive the same tax breaks that employer-supplied coverage gets. These individuals would get a refundable tax credit that increases as one ages, just as health insurance premiums do. This avoids the distortions of tax deductions, which respond more to income, and encourages price competition since the insurance companies don’t get the money.
 
An individual that did not spend his entire tax credit could use the remainder to open a health savings account (HSA). As an HSA grows it gives the buyer more flexibility to buy higher deductible insurance at a lower cost, since he has enough HSA savings to cover the deductible. It’s a positive cycle that benefits the consumer.
 
Pre-existing conditions are also addressed. The plan includes “$7.5 billion a year in defined-contribution federal funding for state-run high-risk pools.” These pools would allow anyone with any condition to buy partially subsidized coverage.
 
The plan also closes loopholes: No one can be dropped or priced out of existing coverage and young people who leave their parent’s coverage have a one-year period to buy coverage subject to the previous rule.
 
Newborns with health problems get the same treatment. Finally, people can move from the employer-provided market to the individual market, and vice versa, without being denied coverage or repriced for a comparable policy.
 
The only failings I see with the proposal is it does not address allowing companies to sell policies interstate, which increases competition, and it doesn’t remove government interference in what a policy is required to include that forces the entire population of a state to pay for the coverage preferences of the few.
 
Still this plan is a vast improvement over Obamacare and deserves thoughtful consideration from all Republicans.
 
Michael Reagan is the son of President Ronald Reagan. He is president of The Reagan Legacy Foundation and chairman of the League of American Voters. Mike is an in-demand speaker with Premiere. Read more reports from Michael Reagan — Go Here Now.
 
 
 
 

© Mike Reagan

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