by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
Addressing a solid health care plan that steers away from Obamacare’s massive redistribution of health should rank high on the to-do list for Republican presidential contenders.
Earlier this week, Wisconsin Governor Scott Walker laid out the framework for his repeal and replace plan, entitled “The Day One Patient Freedom Plan.” Like most market-oriented proposals, tax credits for the purchase of health insurance would be issued to those without access to employer sponsored coverage. Allocating credits directly to the consumer’s hands rather than the insurance company’s hands (as the status quo allows) paves a better path towards patient empowerment. Tax-credits would also be age-based, as such:
John Goodman points out in Forbes that age-based tax credit lessens the perverse effects of Obamacare’s sliding-scale subsidies based off annual household income:
Because Obamacare conditions its subsidies on income, it raises the marginal tax rate for middle income families by six percentage points and in some cases far more. At 400 percent of poverty, a family can lose more than $10,000 in subsidies if it earns one additional dollar. At other “cliff” points, families can be subjected to thousands of dollars of additional exposure (higher premiums, deductibles and copayments) as a result of earning one more dollar. All these perversions vanish if everyone gets the same subsidy regardless of income.
To read more on the full proposal, see here.