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

Expanding opportunity in America
image Moving beyond fear: Addressing the threat of the Islamic state in Iraq and Syria
image Foreign policy is not a 'CSI' episode
image The Air Force’s vital role
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Monday, July 21, 2014 | 9:15 a.m. – 11:30 a.m.
Closing the gaps in health outcomes: Alternative paths forward

Please join us for a broader exploration of targeted interventions that provide real promise for reducing health disparities, limiting or delaying the onset of chronic health conditions, and improving the performance of the US health care system.

Monday, July 21, 2014 | 4:00 p.m. – 5:30 p.m.
Comprehending comprehensive universities

Join us for a panel discussion that seeks to comprehend the comprehensives and to determine the role these schools play in the nation’s college completion agenda.

Tuesday, July 22, 2014 | 8:50 a.m. – 12:00 p.m.
Who governs the Internet? A conversation on securing the multistakeholder process

Please join AEI’s Center for Internet, Communications, and Technology Policy for a conference to address key steps we can take, as members of the global community, to maintain a free Internet.

Thursday, July 24, 2014 | 9:00 a.m. – 10:00 a.m.
Expanding opportunity in America: A conversation with House Budget Committee Chairman Paul Ryan

Please join us as House Budget Committee Chairman Paul Ryan (R-WI) unveils a new set of policy reforms aimed at reducing poverty and increasing upward mobility throughout America.

Event Registration is Closed
Thursday, July 24, 2014 | 6:00 p.m. – 7:15 p.m.
Is it time to end the Export-Import Bank?

We welcome you to join us at AEI as POLITICO’s Ben White moderates a lively debate between Tim Carney, one of the bank’s fiercest critics, and Tony Fratto, one of the agency’s staunchest defenders.

Event Registration is Closed
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.