The editors at National Review Online offer praise to a newly modified Obamacare replacement plan backed by Republican senators Richard Burr and Orrin Hatch:
Conservatives who worry that Republicans will come up with “Obamacare Lite” and call it a replacement can rest easy about this plan. It has no individual mandate, no employer mandate, no federally supported exchanges, and no Independent Payment Advisory Board. Obamacare essentially outlaws what conservatives consider true health insurance (protection against the risk of financially devastating health expenses); this plan legalizes it, and allows it to compete on a more level playing field than even the pre-Obamacare system did.
The federal tax code has for decades favored employer-provided over individually purchased health insurance, and favored expensive insurance that covers routine health expenses over cheaper insurance that is limited to catastrophic ones. The federal government has also allowed states to create regulatory obstacles to the emergence of a national market in individually purchased insurance. The senators’ proposal vastly diminishes the distortions worked by the tax code and knocks down those obstacles. There will be a limit on the tax break for employer-provided insurance so that it does not reward the most gold-plated plans for their expense. And people who do not have access to employer-provided plans will get tax credits with which to buy their own health insurance.
The Republican plan reduces the total amount of health-care subsidies. More important, it reforms them so that they are less destructive. The old policies — again, even the pre-Obamacare ones — effectively locked some people out of the health-insurance market while distorting the behavior of those who were in it. The proposal takes the most practical approach to remedying this situation: People will get a tax break for health insurance whether they get it themselves or through their employers.
The federal tax code has for decades favored employer-provided over individually purchased health insurance, and favored expensive insurance that covers routine health expenses over cheaper insurance that is limited to catastrophic ones. The federal government has also allowed states to create regulatory obstacles to the emergence of a national market in individually purchased insurance. The senators’ proposal vastly diminishes the distortions worked by the tax code and knocks down those obstacles. There will be a limit on the tax break for employer-provided insurance so that it does not reward the most gold-plated plans for their expense. And people who do not have access to employer-provided plans will get tax credits with which to buy their own health insurance.
The Republican plan reduces the total amount of health-care subsidies. More important, it reforms them so that they are less destructive. The old policies — again, even the pre-Obamacare ones — effectively locked some people out of the health-insurance market while distorting the behavior of those who were in it. The proposal takes the most practical approach to remedying this situation: People will get a tax break for health insurance whether they get it themselves or through their employers.
Read the whole thing here.
This proposal and those like it have received criticism from Louisiana governor and possible presidential candidate Bobby Jindal. Jindal’s chief targets are the tax credits the plan offers :
But to Jindal, tax credits such as these are “Obamacare lite.” In Jindal’s plan, following the repeal of the law, the tax break employers enjoy for providing health insurance for their employees would be eliminated. Instead, Americans would have the options of a tax deduction that could be used to purchase insurance. It’s a more purely conservative solution, he aruges.
But Jindal’s critics say it’s “too disruptive.” So after his Washington speech, I asked him, under his plan, would people currently insured by their employer’s plan be allowed to keep their plans?
“Absolutely, if somebody wanted to do that,” Jindal said. “But the point is to give them more choices. The point is, our plan truly replaces and repeals all of Obamacare. All the tax increases, all the spending increases, all the regulations, not just a little bit of it.”
I asked again, to be sure. People would be able to keep their plan if they like it? “Absolutely,” Jindal said. “If people wanted to use their standard deduction to pay for insurance through their employers, they could do that, but they don’t have to. They could also use it through other purchasing mechanisms as well.”
But Jindal’s critics say it’s “too disruptive.” So after his Washington speech, I asked him, under his plan, would people currently insured by their employer’s plan be allowed to keep their plans?
“Absolutely, if somebody wanted to do that,” Jindal said. “But the point is to give them more choices. The point is, our plan truly replaces and repeals all of Obamacare. All the tax increases, all the spending increases, all the regulations, not just a little bit of it.”
I asked again, to be sure. People would be able to keep their plan if they like it? “Absolutely,” Jindal said. “If people wanted to use their standard deduction to pay for insurance through their employers, they could do that, but they don’t have to. They could also use it through other purchasing mechanisms as well.”
