Another alternative to Obamacare

By Tom Quiner

You’ve been told for years that Republicans never presented any sort of competing plan to Obamacare.

Nonsense. There have been many. The media never gave them any play. The best plan of all is a totally free marketplace, which hasn’t been in existence since government began intruding so vigorously beginning in the 1940s.

Obamacare as written and (poorly) implemented by Democrats focuses on government control.

The various Republican approaches broached in recent years focus on consumer control.

Obamacare imposes a mandate on consumers. In other words, you will be required by law to purchase health insurance if you are not insured, or you’ll face higher taxes.

The rationale behind the mandate is understandable. It broadens the insurance pool and in theory will help lower, or at least mitigate, the cost of health insurance. The mandate helps to reduce freeloaders in the system, goes the theory, to save the rest of us money.

As things stood before Obamacare, a chunk of people didn’t carry health insurance. When they get sick, they typically can’t pay for all their health care, so they get bailed out by the rest of us who have been paying for health insurance all along.

It doesn’t seem fair. That’s why the conservative-leaning think tank, The Heritage Foundation, embraced the idea of a mandate back in the 80s. That’s why Newt Gingrich also embraced the mandate back in 1992.

Both Heritage and Mr. Gingrich backed away from the heavy-handed government mandate, because there is a better, more just way to accomplish the same thing. Rather than penalizing the uninsured, we should reward the insured.

Let’s use a carrot instead of a stick to reward the insured and encourage the uninsured to become insured.

We should extend a tax credit to everyone with health insurance, which is similar to the current system if you get insurance through your employer. We should extend the tax credit to individuals who also purchase their own health insurance. In other words, let’s not discriminate on where people get their insurance, let’s reward everyone for purchasing it, because it is good for society.

People without the insurance, of course, do not receive the credit since they are being partially subsidized by the folks who do. This seems logical and fair. (Specifically, the non-insured consume half the health care as the insured, but they only pay for half of what they consume. That means the insured subsidize a quarter of what the uninsured consume.)

However, there’s an inequity in the current system. Higher earners tend to get more of their health insurance subsidized by their employer than lower income earners. We can level the playing field by providing everyone a fixed sum, refundable tax credit.

There’s something we can do using this approach to help the uninsured who can’t pay their bills. They’re paying more in taxes since they’re unable to claim the health insurance tax credit. Let’s take the extra tax money they’re paying and put it in a charity pool to help them when they need it instead of pouring it down the government rathole. It’s kind of like insurance without calling it insurance.

Under this approach, no one is forced to purchase health insurance, but they’re financially rewarded if they do through lower taxes.

If they decide they don’t want insurance, fine, but they pay more in taxes. Those taxes are then set aside and used to help the uninsured who face health hardships.

This plan comes from us via John Goodman of the National Center for Policy Analysis.

What do you think? Do you prefer a carrot or a stick?