Email 1: โWhy not just get health care out of the tax code once and for all? No tax credits, no tax deductions, no subsidies period. Let the market work.โ
If we were starting from scratch, Iโd be inclined to go that route. But we have had a tax break for employer-provided coverage for decades. The government could not get rid of it without upending longstanding health-insurance arrangements for tens of millions of Americansโwhich makes it both a bad idea and a politically impossible one. We can and should, however, reduce how much tax policy influences decisions about health insurance. We should reduce the tax codeโs favoritism toward employer-provided coverage, and toward more expensive insurance policies, while being careful not to threaten the policies of most people who now have employer coverage. The Burr-Hatch-Upton bill does that.
Email 2 (in response to this article about this weekโs Supreme Court case on Obamacare): โYouโre wrong to say that the justices made up their remedies on Medicaid โout of thin air.โ They relied on a severability clause in existing law.โ
I thought the conservative justicesโ dissent in NFIB v. Sebelius made short work of that argument (pp. 46-8). โThe Court today opts for permitting the cut-off of only incremental Medicaid funding, but it might just as well have permitted, say, the cut-off of funds that represent no more than x percent of the Stateโs budget. The Court severs nothing, but simply revises ยง1396c to read as the Court would desire.โ But even that point is a little tangential to what I was saying. Which is this: The idea that the federal government can cut off โadditionalโ Medicaid funds from states in response to their policies, but cannot cut off all Medicaid funds, cannot plausibly be located in the Constitution. So the notion that the โremedyโ solves a constitutional problem is indeed drawn from thin air.






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