Politics & Policy

Tom Price’s New Conservative Obamacare Alternative Is Just What the Dr. Ordered

Congressman Tom Price (R., Ga.) (Allison Shelley/Getty)

Last week, House Budget Committee chairman Tom Price released a new Obamacare alternative that Bill Kristol calls “the strongest Obamacare alternative offered in Congress to date.” The Washington Post’s Greg Sargent writes of Price’s proposal that “it’s good to have a fleshed out plan, because it helps clarify the differences between the parties on health reform.” He continues, “GOP reforms would likely translate into lower-quality plans and a coverage expansion that would benefit fewer people. But that would be the tradeoff Republicans would make to achieve their goal of less government spending and interference in the market than that which occurs under Obamacare.”

In truth, GOP reforms like Dr. Price’s would translate into lower-cost insurance, higher-quality care, and tax cuts that would benefit more people — namely millions of Main Street Americans. But raising costs while lowering quality is the tradeoff that liberals would make to achieve their goal of consolidating and centralizing power, coercing Americans into buying things they don’t want, and dumping millions of “newly insured” into Medicaid.

The new Price alternative, which is based on the Obamacare alternative advanced by the 2017 Project (which I run and Kristol chairs), is the latest proposal from one of the few Republicans who has been putting out Obamacare alternatives since before the Democrats passed their massive health-care overhaul in open defiance of public opinion. While the bill number of Price’s legislation remains the same (H.R. 2300), the proposal has changed and is now uniquely suited to unite the full spectrum of Obamacare opponents, from tea-party conservatives to centrist independents.

Indeed, Price’s new alternative drew 46 original co-sponsors — that is, House members who signed on by Day One — including Jeb Hensarling and Marsha Blackburn. (To put that feat into perspective, the previous version of H.R. 2300 didn’t have any co-sponsors on Day One.)

Price’s legislation brings us that much closer to repealing Obamacare and replacing it with real reform that would move things in a conservative direction from the pre-Obamacare status quo.

The new model of H.R. 2300 differs from the prior model in several key ways. Instead of a combination, in the individual market, of income-based tax credits and tax deductions, it now calls for simple age-based tax credits, which will let people quickly see what they’ll receive, reduce the I.R.S.’s role, and avoid work-disincentives. In addition to making it easier for people to have and use health savings accounts, it now offers a one-time tax credit of $1,000 per person for having or opening an HSA. Instead of an open-ended tax break for employer-based insurance, it now closes that tax loophole while continuing to give those with employer-based insurance their full tax break on insurance that costs up to $20,000 for a family or $8,000 for an individual. In other words, the tax treatment of the typical person’s employer-based plan wouldn’t change one bit (and anyone with, say, a $23,000 plan, would still get the full tax break on the first $20,000).

Price’s alternative, therefore, would deal with both costs and coverage while finally fixing a longstanding inequality in the tax code for millions of middle-class Americans who have to buy health insurance on their own. Since the 1940s, those with employer-based insurance have gotten a generous tax break, while those without employer-based insurance generally have not. Obamacare’s 2,400-plus pages managed to assault Americans’ liberty without correcting this unfairness in the tax code. Price’s 242-page bill achieves what Obama’s could not — at one-tenth the length.

Under Obamacare, the typical 40-year-old single woman, making just $35,000, gets $0 in Obamacare subsidies — she’s too young and too middle class. (Obamacare is for the near-elderly and near-poor.) Under Price’s proposal, she’d get a $2,100 tax credit, which, assuming she doesn’t itemize her taxes, would come entirely in the form of a tax cut. She could use that tax credit to buy the insurance of her choice on the open market, not the insurance the federal government compels her to buy through a government-run exchange. And if she chose to buy a low-premium plan that costs, say, $1,800, she could put the extra $300 into an HSA.

Writing of “the contrast between the two parties on what each really wants for [health-care] reform over the long haul,” Sargent argues that “while Obamacare continues to poll badly, there’s no particular reason to assume that contrast would benefit Republicans.” However, a poll last fall by McLaughlin & Associates found that, with “a conservative alternative” on the table that deals with both costs and coverage, 60 percent of Americans supported repeal, while only 32 percent opposed it. (38 percent of those polled were Democrats, compared with just 32 percent who were Republicans.)

Since Obamacare was first unveiled, Americans have disliked its liberty-sapping, cost-hiking mandates, and they’ve opposed the arrogance of politicians and bureaucrats who think our health-care system can be better run — by them — from Washington. Americans have been poised to embrace repeal, but they’re waiting for conservatives to offer up a credible alternative. Price’s legislation brings us that much closer to repealing Obamacare and replacing it with real reform that would move things in a conservative direction from the pre-Obamacare status quo.

— Jeffrey H. Anderson is executive director of the 2017 Project, which is working to advance a conservative-reform agenda, including a winning alternative to Obamacare.

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