Governor Scott Walker is a fighter. He has shown that in his home state of Wisconsin, where unions and the far-left have repeatedly challenged him. Now he has released his healthcare reform plan to take on the challenge of repealing and replacing ObamaCare.
Walker calls his healthcare reform plan the Day One Patient Freedom Plan. Like Senator Marco Rubio’s plan, Walker calls for refundable tax credits to replace insurance subsidies. Walker’s plan specifically adjusts these credits with age from $900 per child to $3000 for adults between 50 and 64 years old. (Medicare eligibility begins at 65.)
Rubio’s plan does not specify that the tax credits increase with age but basing them on age rather than income is an improvement over ObamaCare, which phases the subsidies out with income, thereby creating a disincentive to work more and earn more. The result has been many more part-time workers.
Walker would restore the regulation of health insurance to the states. This would reduce federal intrusions and works well with other forms of insurance including auto and life. Deregulation would also lower the cost of insurance premiums by eliminating costly requirements as seen in ObamaCare.
Walker favors block grants for states to provide Medicaid. But he would also reorganize Medicaid to target poor women and children, the disabled and low-income seniors with acute long-term health problems. Everyone else not eligible for Medicaid would receive the same tax credits as the general population. He has already engineered a similar approach to coverage in his home state of Wisconsin.
The Walker plan borrows heavily from the Coburn, Hatch, Burr plan introduced in the Senate in 2014. Their reasonable approach to healthcare reform would be a significant improvement over the current healthcare mess seen with ObamaCare.
ObamaCare remains unpopular but repeal without replacement is not a politically viable strategy. Now that the people have seen improvements from the old system such as coverage of pre-existing conditions and eliminating caps on insurance coverage, the American people want a new system that’s better than ObamaCare and better than the old status quo.
To be sure, Walker has left out some important details. He has not explained how he will pay for the tax credits, nor how to manage the consequences of significantly different tax treatment of health benefits earned at work versus self-employed. He has also left unclear how he will cover pre-existing conditions. He calls for a cap on the tax exclusion of employer-provided insurance but hasn’t given specific numbers. He has also failed to discuss his plans for Medicare, unlike Senator Rubio.
John Graham, writing in Forbes, sees problems in Walker’s unequal treatment of the tax credits between individuals purchasing health insurance and those who receive employer-provided insurance. He believes this will introduce a bias in people’s choice of work. Low-income households would prefer the tax credit ( and self-employment), while high-income households would prefer the exclusion (and corporate employment). Rubio’s plan offers a “glide path” to equalizing this tax treatment over the next decade.
Senator Rubio has given more details of his plan than Governor Walker, but both have merit and contribute positively to the healthcare debate. Now it’s time for the other candidates to offer their ideas to repeal and replace ObamaCare with a healthcare system Americans can be proud of, again.