The Republican presidential debate on healthcare has finally begun. The issue was largely ignored in the first publically held debate on Fox News, except for Donald Trump’s uninformed statements on single-payer healthcare in Canada and Scotland. (See my earlier post Trump Wrong on Single-Payer Healthcare.)
Senator Marco Rubio posted his healthcare plan in an Op-Ed piece published in Politico and Governor Scott Walker just released his plan called Day One Patient Freedom Plan. Pressure is now mounting for the other candidates to discuss their healthcare plans soon.
Rubio correctly declares ObamaCare as a fatally flawed program, not just because it is poorly constructed, but because it relies on the liberal philosophy that the federal government can solve our problems through more spending, more taxes, more regulations, and more bureaucrats. President Obama’s one-size-fits-all, big government experiment has failed the American people.
Three Primary Components
Rubio’s plan has three primary components:
- Refundable tax credits to purchase health insurance
- Reform of insurance regulations and Health Savings Accounts
- Reforms of Medicaid and Medicare
Refundable tax credits
Rubio calls for advanceable, refundable tax credits for all Americans to use to purchase health insurance. The value of these tax credits should increase every year and he calls for setting the tax preference for employer-sponsored insurance on a “glide path” to ensure that it will equal the level of the credits within a decade. This is to offset the current unequal tax treatment of health insurance benefits provided by employers. This will eventually level the playing field for the self-employed and those not receiving employer-sponsored insurance. It will also allow insurance to be portable when you change jobs.
John Graham, writing in Forbes, notes the importance of these tax credits not phasing out with increasing income. This eliminates one of the onerous provisions of ObamaCare, which eliminates subsidies as income increases, thereby imposing extremely high effective marginal income tax rates at certain incomes. In other words, ObamaCare discourages people from working harder and earning more. This encourages people to work part-time only.
Reform of Insurance Regulations and Health Savings Accounts
Rubio calls for coverage of pre-existing conditions by federally supported, actuarially-sound and state-based high risk pools. He would allow purchase of insurance across state lines to increase competition and lower prices. He would encourage Health Savings Accounts (HSAs) by expanding their limits and their usefulness. He would also prohibit the bailout of insurance companies with taxpayer funds, as is currently happening under ObamaCare.
This plan would preserve the coverage of pre-existing conditions but eliminate the perverse regulations of ObamaCare that only drive-up the cost of insurance for everyone. It would also eliminate the infringement upon religious freedom inherent in ObamaCare, which dictates what coverage every employer must provide.
Reforms of Medicaid and Medicare
Rubio also acknowledges the fiscally unsound paths of Medicaid and Medicare and calls for reforms. He wants to move Medicaid to a per-capita block grant system which would give states more control over how they manage the same resources. He also wants no changes in Medicare for current enrollees but calls for transitioning future generations into a premium-support system. This is designed to increase competition for seniors like current plans Medicare Advantage and Medicare Part D already do. Both of these plans have been well-received and have shown savings over cost predictions when they were introduced.
Lastly, Rubio calls for no new taxes on the American people to fund his plan. This compares dramatically to ObamaCare, which has raised taxes by $1.2 Trillion. The details of this last claim need to be better explained but the goals of lowering taxes, reducing government regulations, increasing consumer choices, preserving religious freedoms, and lowering the cost of healthcare make Senator Rubio’s plan worthy of serious consideration.
(Next post – Governor Scott Walker’s healthcare plan.)