The House Republicans’ recent Obamacare replacement proposal, “A Better Way: Our Vision For A Confident America”, is hailed by most conservatives as a meaningful step in the right direction towards a market-oriented health care system. It goes beyond repealing and replacing Obamacare, since it offers suggestions on reforming big government programs like Medicare and Medicaid as well.

Others think that the 37-page proposal is a load of replacement ideas that are strikingly similar to Obamacare. Both lefties and libertarians call it ‘Obamacare- lite’. Here’s one of the big reasons why:

  • Restructuring Obamacare’s health insurance subsidies: Under the status-quo, people who don’t have access to health insurance through their employer and don’t qualify for Medicare or Medicaid can be eligible for subsidized health insurance when purchasing a plan on their own through Obamacare’s Exchanges. But those who are currently eligible for subsidies don’t receive an income-based voucher to use for offsetting their premium cost when shopping for a plan. Those subsidies are instead funneled to insurance companies. What Paul Ryan & Co. propose is to extend a universal refundable tax credit straight to the consumers hands instead. This can be claimed if people purchase a government approved health plan.
  • Michael Cannon, director of health policy studies at the libertarian Cato Institute, cautions that the refundable tax credit is a back-door way of enforcing an individual mandate upon people to purchase health insurance. The only way people will be able to claim that credit is if they purchase a government approved health plan. If they don’t, they owe money to the government. And, the tax credit mechanism increases government spending if a person’s tax credit amount is more than his/her tax liability.
  • Read up on his more detailed response here.