An Idea Whose Time Has Come!

In a Wall Street Journal editorial, Ramesh Ponnuru (American Enterprise Institute) and Yuval Levin (Ethics and Public Policy Center) discuss how to reform health care the right way. Their suggestion is a good one:

  • Replace the tax exclusion for employer coverage with a uniform tax credit.
  • The credit would be sufficient in most cases to buy catastrophic coverage; but after-tax dollars would be required to upgrade to a Cadillac plan.
  • Let the poor either choose Medicaid or use their tax credit and additional funds out-of-pocket to buy private coverage.

The proposal Ponnuru and Levin described is almost identical to the National Center for Policy Analysis’ Alternative to the Affordable Care Act.

Ponnuru and Levin explain:

Conservative policy experts have long proposed such approaches, but Congressional Republicans, with a few honorable exceptions, have not taken them up in recent years…

Some Republicans think that political success requires nothing more than watching ObamaCare fail. But if the new system quickly implodes, that would be all the more reason to have an alternative on hand — other than another leftward move toward single payer. And it might not implode so quickly.

Comments (13)

Trackback URL | Comments RSS Feed

  1. Jimbino says:

    That would be a very bad idea. It may be news to you, but there are consumers of medical care, like the Amish and me, who do not care for insurance any more than Jesus (“Consider the birds ….”). If there is a tax credit, I want to be able to use it to subsidize my self-pay health care. I don’t need an insurance middleman any more than I need a pope.

    Of course conservatives like it: they like any measure that steals wealth and income in order to support drug, insurance and banking industries.

    • Adam says:

      “I don’t need an insurance middleman any more than I need a pope.”

      Someone needs to reexamine both the economic benefit of middlemen and early Christianity’s take on the Papacy.

  2. Jackson says:

    “Cadillac plan.”

    I feel bad for Cadillac. They’re constantly being referred to as something expensive and unnecessary.

  3. Billy says:

    “Some Republicans think that political success requires nothing more than watching ObamaCare fail.”

    Which is why the GOP is in such trouble. We need stronger leadership, not more symbolic or more principled leadership.

  4. Wilbur says:

    “But if the new system quickly implodes, that would be all the more reason to have an alternative on hand”

    It’s not just good to have a new system ready to propose and implement, it’s NECESSARY.

  5. Bill says:

    “Insurance will be sold in health insurance exchanges; however, no one will be allowed to game the system.”

    Anyone care to explain what ‘game the system’ means?

  6. Bob Hertz says:

    I like a lot of this proposal, but I do want to call out one rather loopy concept.

    Which is the hope that Medicaid recipients would take their tax credit, and add to it to obtain a better private plan.

    In most states until very recently, no adult under 65 could get Medicaid unless they were a woman with a young child and an income of about $11K a year.

    To think that this group would another $2000 a year to get a health plan with a better network but a $1500 deductible and 20% coinsurance seems a little dreamy to me.

    In some states now, after Obamacare, a childless adult can get Medicaid with an income under about $15K a year.

    Still the private options seems pretty dreamy.

    I should read Avik Roy’s new book, maybe I am missing something.

    But no one who has been poor would be floating the concept that I read in Ponnuru’s proposal.When you are really poor, free medicine trumps anything else.