by Mitch Kokai
Senior Political Analyst, John Locke Foundation
More money—both for Medicaid and the tax credits—is the chief concern of moderates. And that could help pave the way for giving conservatives what they want: More flexibility and freedom from Obamacare’s costly and onerous regulations.
To that end, Texas senator Ted Cruz has come up with an idea that would earn not only his vote but also that of Utah’s Mike Lee: “If an insurance company offers at least one plan in the state that is compliant with the [Obamacare] mandates,” Cruz said Wednesday, “that company can also sell any additional plan that consumers desire.”
Cruz’s plan could solve the central problem of Obamacare, which is that the program provides coverage to people with pre-existing conditions on the individual market by forcing a tiny slice of the population—relatively healthy middle-class families and individuals who don’t have employer-sponsored health insurance—to pay thousands of dollars more each year for health insurance.
Cruz’s plan would allow these middle-class families on the individual market without high healthcare costs to purchase cheaper plans, while also protecting those with pre-existing conditions in the Obamacare-compliant plans. In effect, it would turn the Obamacare-compliant plans into high-risk plans, but insurance could remain affordable to those with pre-existing conditions because the premiums are capped at a percentage of income for those earning 350 percent of the poverty line or less (that is, a modified adjusted gross income of $85,000 or less for a family of four).
This would cause the cost of the subsidies to skyrocket for those in the Obamacare-compliant plans, but conservative senators say having taxpayers transparently pick up the tab makes more sense than forcing the small number of people who lack an employer-sponsored plan to pay for those with pre-existing conditions.