How to repeal and replace: From a tax to tax credits
Obamacare may be constitutional but it isn’t the answer. A refundable tax credit is.

The Supreme Court has just told us that ObamaCare's mandate to buy health insurance is constitutional under the government's taxing authority, but this decision will not settle the debate. Republicans have vowed to repeal and replace ObamaCare-and if Mitt Romney wins the presidency, they just might succeed. But Republicans have been vague about the replacement. Here's a suggestion: Replace ObamaCare with a refundable tax credit funded by taxing employer-provided health insurance.

Each year, some Americans contract a dire illness or suffer a serious injury but can't pay their medical bills. They usually still get treatment, but the costs are passed on to the rest of society. Sometimes taxpayers pick up the tab. Other times, hospitals and doctors absorb the cost, which shows up in higher health insurance premiums for all of us. To address this challenge and move towards universal coverage, Congress should tax employer-provided health insurance and use the revenue to offer a refundable tax credit that will empower the uninsured to purchase coverage against catastrophic health costs.

As the government correctly argued in the ObamaCare case, in a very real sense everyone is in the market for catastrophic medical care every year. We all face the risk of getting cancer or being hit by a bus, and no one would be refused needed treatment. Some of us pay for that treatment in advance by buying health insurance. Others do not insure, creating the risk that much of their costs will be passed on to the rest of society-a risk that is often realized.

Read the full article at The American.

Michael R. Strain is a research fellow at AEI.

 

 

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Michael R.
Strain

What's new on AEI

We still don't know how many people Obamacare enrolled
image The war on invisible poverty
image Cutting fat from the budget
image Speaker of the House John Boehner on resetting America’s economic foundation
AEI on Facebook
Events Calendar
  • 22
    MON
  • 23
    TUE
  • 24
    WED
  • 25
    THU
  • 26
    FRI
Monday, September 22, 2014 | 2:30 p.m. – 4:00 p.m.
Policy implications of the new US labor market normal

We welcome you to join us as a panel of economists discuss US wage and price prospects in the coming months and the implications for the Federal Reserve’s current unorthodox monetary policy.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.