HOW TO REPEAL AND REPLACE OBAMACARE

First: Pass the Replacement. With 20 million people on Obamacare it makes no sense and is politically foolhardy to repeal the current program without having the replacement ready. Once the replacement is in place, repeal is a viable and much less controversial alternative.

Second: Keep the Most Important Benefits of Obamacare. These are (1) no one with a pre-existing condition may be turned down for insurance; (2) children up to 26 years of age may continue on their parents’ policy; and (3) no lifetime limits on coverage. To preserve these benefits Congress can simply require insurance companies to include them in their health insurance policies. Congress already does this, so this is just a matter of preserving the status quo on this issue. Of course, with these requirements the price of health insurance will go up, as it already has under Obamacare. How can this be addressed?

Third: Add Tax Credits for Everyone. The beauty of a tax credit is that a person can receive money from the government even without owing taxes. My idea is that everyone gets a tax credit equal to the cost of a very basic health insurance policy. Persons who want a more generous policy could buy a supplement, just like Medicare supplements, which have already proved successful for people not satisfied with basic Medicare. Insurance companies will undoubtedly enter the supplement market, because they can make money that way. Why give rich people a tax credit? Because health care should be a right. Because rights should not depend on your income. And because Republicans are most unlikely to help the poor without also helping the well off.

Fourth: Use Bankruptcy Law To Incentivize Coverage. Under Obamacare people are subject to a tax penalty if they do not get coverage. I suspect relatively few would need an incentive to get coverage with the generous tax credit I have included. But for the few who are extremely hard to convince, the discharge in bankruptcy could be amended to exclude medical debts that would have been covered by the basic policy. Telling people they will be stuck with a debt which they could easily have avoided should do the trick.

Fifth: This Really is Different from Obamacare. What are differences? There are no exchanges with their attendant bureaucracies. People will have to shop for health insurance, just like they do today for car insurance or homeowner’s insurance. The IRS is out of the enforcement business. They are just doing tax credits, something they have done for years and know how to do quite well. Moreover, with the tax credit it seems likely that the number of people who actually have health coverage might even be larger than under Obamacare. Wouldn’t that be a great benefit, too?