Politics & Policy

Rubio’s Health Plan Has an Individual Mandate

Rubio speaks at a rally in Houston, Tex., February 24, 2016. (Joe Raedle/Getty)
Trump has disavowed his support for an individual mandate. Will Rubio do the same?

When Republican presidential front-runner Donald Trump momentarily embraced Obamacare’s individual mandate before disavowing it, Rush Limbaugh and other conservatives caught the vapors. But where is conservative outrage over Marco Rubio’s health plan, which actually contains an individual mandate?

Rubio, unlike his opponents, has offered details on how he would replace Obamacare. (Trump merely promises “something terrific.”) He builds his replacement plan around an individual mandate, and an expansion of Obamacare’s spending. Rubio’s plan is so similar to Obamacare, so disruptive, and so easily demagogued, you would think he was a Democratic mole.

The centerpiece of Rubio’s proposal would “provid[e] every American with an advanceable, refundable tax credit that can be used to purchase insurance.” What does that mean? If you purchase a government-approved health plan, you could save, for example, $2,000 on your taxes. If you don’t, you pay that $2,000 to the government.

That is exactly how Obamacare’s individual mandate works. No less an authority than John Goodman, the dean of conservative health-care reformers, says tax credits are a “financial mandate” to purchase health insurance.

Rubio’s tax credit would thus give the federal government as much power to force you to purchase unwanted coverage as Obamacare does. Under Obamacare, the federal government gets to decide what coverage you must buy in order to avoid the penalty. Under Rubio’s plan, the federal government would have the same power.

For many Americans, Rubio’s mandate could be more punitive than Obamacare’s. Rubio hasn’t specified the precise penalty he would make you pay the IRS if you failed to purchase a government-approved plan, but other tax-credit proposals would create penalties that rival Obamacare’s.

#share#The similarities to Obamacare don’t end there.

Rubio’s tax credits, like Obamacare’s, are “refundable.” That means that if your tax liability is zero, you get a $2,000 check from the government. Obamacare’s so-called “tax credits” are actually 80 percent government spending. Rubio’s plan takes this concept and expands it to 10 or 20 times as many people as Obamacare does.

As if that weren’t bad enough, Rubio’s plan involves unnecessary tax increases and fails to protect workers, features that Democrats will demagogue ruthlessly.

Commendably, Rubio tries to make health insurance more secure by eliminating the tax preference for employer-sponsored insurance. But his approach is ham-handed and self-defeating. Rather than cut taxes for everyone, he would level the playing field by taxing many workers’ health benefits.

Perhaps most troubling is that, even though employers could respond to his plan by dropping their health benefits, Rubio would do nothing to return to workers the money their employers spend on their health benefits. For workers with the average family plan, that’s $13,000 of their earnings that Rubio does nothing to try to put into the worker’s hands immediately. As a result, Democrats will demagogue Rubio’s plan exactly the way Barack Obama demagogued John McCain’s tax-credit proposal in 2008.

Republicans have an alternative that would avoid these pitfalls. Expanding tax-free health savings accounts would move in the opposite direction of Obamacare by reducing health-care costs, making health insurance more secure, and delivering an effective tax cut of $9 trillion over ten years. That’s larger than all the Reagan and Bush tax cuts combined. “Large” HSAs would also allow more secure insurance products—innovations that Rubio’s tax credit would block.

#related#Were it not for Donald Trump, Marco Rubio’s individual mandate might be the most ridiculous thing happening in the Republican party this campaign season. Even as every Republican candidate for national office promises to repeal and replace Obamacare, the favorite candidate of both the GOP establishment and the “reformocon” class of conservative intellectuals is promising to cement many of Obamacare’s worst features in place — including its least popular provision — by giving them a conservative imprimatur.

Republicans may not have noticed the similarities between Rubio’s health plan and Obamacare, but Democrats certainly will. If the GOP’s presidential candidate marches under the banner of health-insurance tax credits, this will be the second presidential election in a row in which Republicans have denied voters a clear choice on Obamacare by nominating a candidate who has zero credibility as an Obamacare critic. Democrats will expose the hypocrisy, and voters will rightly dismiss Republican criticisms of Obamacare as a partisan charade.

Michael F. Cannon — Michael F. Cannon is the Cato Institute’s director of health policy studies. Cannon has been described as “an influential health-care wonk” (Washington Post), “ObamaCare’s single most relentless antagonist” (The New ...

Most Popular

Immigration

Angela Rye Knows You’re Racist

The political philosopher Michael Oakeshott said that the “rationalist” is hopelessly lost in ideology, captivated by the world of self-contained coherence he has woven from strands of human experience. He concocts a narrative about narratives, a story about stories, and adheres to the “large outline which ... Read More
Immigration

What the Viral Border-Patrol Video Leaves Out

In an attempt to justify Alexandria Ocasio-Cortez’s absurd comparison of American detention facilities to Holocaust-era concentration camps, many figures within the media have shared a viral video clip of a legal hearing in which a Department of Justice attorney debates a panel of judges as to what constitutes ... Read More
Politics & Policy

Pro-Abortion Nonsense from John Irving

The novelist has put up a lot of easy targets in his New York Times op-ed. I am going to take aim at six of his points, starting with his strongest one. First: Irving asserts that abortion was legal in our country from Puritan times until the 1840s, at least before “quickening.” That’s an overstatement. ... Read More
Film & TV

Murder Mystery: An Old Comedy Genre Gets Polished Up

I  like Adam Sandler, and yet you may share the sense of trepidation I get when I see that another of his movies is out. He made some very funny manboy comedies (Billy Madison, Happy Gilmore, The Waterboy) followed by some not-so-funny manboy comedies, and when he went dark, in Reign over Me and Funny People, ... Read More