Mt. Vernon Register-News

Opinion

February 27, 2014

Obamacare fix liberals can love

(Continued)

This is because employees still pay significant costs out of pocket for their coverage. In Mulligan’s example, a full-time employee costs her company about $56,000 in total compensation, including family coverage. The employee’s annual share of her insurance costs (including premium contributions and co-pays) comes out to $7,667. A part-time worker with Obamacare coverage, on the other hand, would only pay $4,342 in total out-of pocket- costs — 44 percent less, thanks to generous taxpayer subsidies.

Rather than bluntly assail the ACA as a “takeover” of U.S. health care, conservatives need to recognize that government’s distorting role in labor and health insurance markets started more than 60 years before Obama took office — during World War II, when employers were first allowed to offer employer-provided health insurance as a tax-free benefit to employees.

Today, large employers fiercely protect the employer tax exclusion because it allows them to compete for labor more cheaply than if they had to offer compensation that was taxed as wages. (A dollar of wages is taxable for both the employee and the employer, while a dollar of health-care compensation is untaxed for both of them.)

Unfortunately, rather than confronting the tax problem head on, Obamacare offers a confusing hodge-podge of premium tax credits and cost-sharing subsidies as an alternative to employer coverage. But, as the CBO report implicitly shows, the Affordable Care Act expands insurance coverage at the cost of creating yet another tier in the U.S. health-insurance caste system, giving some workers more generous tax subsidies than others with employer-based coverage, depending on the number of hours they work.

The solution is to equalize and cap the tax preference for health insurance between the ACA exchanges and employer-provided insurance (a Republican Study Committee proposal from last year envisioned such an arrangement), while also eliminating the employer mandate. A flat-tax credit (tied to catastrophic coverage and health-savings accounts) that was available to all Americans would remove the Obamacare penalty that accrues to working more hours, and would encourage economic mobility because the choice of where to attain insurance would be entirely tax neutral. Employers could still pool the credits for their employees, and purchase group coverage, or make it easier to purchase insurance through private insurance exchanges.

Text Only
Opinion
  • Questions for Obamacare after the ruling Tuesday, I outlined what we knew about Halbig v. Burwell, the case in which a federal appellate court ruled that subsidies for purchasing insurance under Obamacare can only be made available on marketplaces established by states. Now I propose to out

    July 24, 2014

  • Pensions not the problem I see in last night’s Register-News paper that James Rippy has attempted to enlighten us on pensions in Illinois. I also notice he has written so often he no longer has the title “guest columnist.” It is obvious he has the time and energy to work on

    July 24, 2014

  • Impasse threatens border solution After more than a year of contentious debate, could Congress be any more divided over the issue of immigration? The answer is yes.In the House, positions are hardening over what to do about the tens of thousands of families and unaccompanied young im

    July 24, 2014

  • Take a lesson from Texas I like to eat at blue-collar diners and cafes, particularly when I’m on vacation.It’s a chance to step beyond the homogenized national chains and experience a bit of local flavor.And being a reporter, I like to chat up local folks to find out a bit a

    July 23, 2014

  • The future reality of terrorist drones A very small airplane rose over the Gaza Strip last week. It entered Israeli airspace and sped toward the coastal city of Ashdod. Then a Patriot missile blew it up.The plane, a rudimentary drone launched by the terrorist group Hamas, posed little thr

    July 23, 2014

  • We are headed to a jobless future In an op-ed in The Wall Street Journal, former Treasury Secretary Lawrence Summers revived a debate I’d had with futurist Ray Kurzweil in 2012 about the jobless future.He echoed the words of Peter Diamandis, who says that we are moving from a history

    July 23, 2014

  • Pensions need to be addressed I will have to admit that I am slightly overwhelmed today with the receipt of articles and suggestions for a column. One of my Fitness Mafia colleagues constantly tells me the columns are too long and trying to address different subjects just dilutes

    July 22, 2014

  • VA still failing our vets Jymm’s preferred attire is a skin-tight Minnie Mouse T-shirt with bright pink windbreaker pants. Even when not sporting his choice outfit, he dons short shorts and shirts with holes in them, because that’s what he finds most comfortable. His Santa Mo

    July 22, 2014

  • Feed your home piggy bank with a 15-year mortgage This summer, we finally decided to take the plunge we’d been contemplating for a while: converting our 30-year mortgage to one with a 15-year payoff. It’s a big step. Our payments will go up somewhat (the PITI — principal, interest, tax, and insuranc

    July 19, 2014

  • Under the dumb There is a TV series about an entire town trapped under a giant, mysterious crystal-clear dome that appears out of the blue one day. The dome is impenetrable; no one can get in, no one can get out. Who made the dome? Aliens? God? A super-secret branc

    July 19, 2014

Twitter Updates
Facebook
Stocks