The Corner

Taxes and Health Care: How Far How Fast?

Peter Ferrara argues that the heart of a plan to replace Obamacare should be a change in tax policy. Instead of an open-ended tax break for employer-provided coverage, the federal government should provide everyone with a flat tax credit that they can use to pay for either employer-provided or individually-purchased health insurance. James Capretta and Jeffrey Anderson make the case for a slightly different plan. They would provide the tax credit to people who don’t work for large employers that offer health insurance, while capping the tax break for those employers’ plans.

The Capretta-Anderson approach forgoes certain benefits of the Ferrara plan. Capretta and Anderson would not give people who get their insurance through large employers the freedom to exit their plans to get a better deal on the individual market–unless, that is, they are willing to use their own after-tax dollars to do it. But the Capretta-Anderson approach also avoids certain dangers. Let people in large employer plans use tax credits to get out, and younger and healthier people might start rushing for the exits, leaving the employers covering an older and sicker population. They would then have to raise premiums or drop coverage. The risk, then, is that the employer-based system on which most Americans currently rely would unravel. That possibility would make the plan a pretty heavy lift politically.

But I think the worries people have about life without employer-provided insurance would diminish a lot over time if the individual market were larger and better developed, which is one reason I think the Capretta-Anderson plan might be a good waystation toward the eventual adoption of the Ferrara plan. The individual market would expand a lot under the Capretta-Anderson approach but would not have to replace the employer market in a rapid and disruptive way. And we would reap the most important benefits (expanded coverage, more cost-conscious consumers) early in the process, while admittedly deferring the relatively less important benefits (the ability of people who work for large employers to change their health coverage without changing their jobs) until later.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

Most Popular

Elections

Biden: Make America Great Again

A promise of economic nationalism, an expensive infrastructure bill that’s really a make-work program, prejudice against foreigners, denunciations of Wall Street — Joe Biden is running the 2016 Trump campaign against Donald Trump in 2020. Joe Biden gave a big economic speech in Pennsylvania yesterday, and ... Read More
Elections

Biden: Make America Great Again

A promise of economic nationalism, an expensive infrastructure bill that’s really a make-work program, prejudice against foreigners, denunciations of Wall Street — Joe Biden is running the 2016 Trump campaign against Donald Trump in 2020. Joe Biden gave a big economic speech in Pennsylvania yesterday, and ... Read More
Culture

No One Is Ever Woke Enough

Closing out the week: The Harper’s letter calling for freedom of expression demonstrates that no one is ever “woke” enough, and that any institution that tries to make peace with the perpetually aggrieved eventually becomes dysfunctional; the value of Hamilton as a litmus test of the limits of cancel ... Read More
Culture

No One Is Ever Woke Enough

Closing out the week: The Harper’s letter calling for freedom of expression demonstrates that no one is ever “woke” enough, and that any institution that tries to make peace with the perpetually aggrieved eventually becomes dysfunctional; the value of Hamilton as a litmus test of the limits of cancel ... Read More

Mel Gibson’s Beastmode

Late-period Mel Gibson is probably the best Mel Gibson; in film after film after film he plays ornery old bastards with such conviction that each successive outing feels like a personal trip to the confessional. He doesn’t need the money anymore, and most of these roles are in indie movies that pay very little ... Read More

Mel Gibson’s Beastmode

Late-period Mel Gibson is probably the best Mel Gibson; in film after film after film he plays ornery old bastards with such conviction that each successive outing feels like a personal trip to the confessional. He doesn’t need the money anymore, and most of these roles are in indie movies that pay very little ... Read More
Culture

Mark Zuckerberg Is Right

Mark Zuckerberg clearly hasn’t gotten the memo. The founder of Facebook persists in defending free expression, even though free speech has fallen decidedly out of fashion. His reward for adhering to what once would have been a commonsensical, if not banal, view of the value of the free exchange of ideas ... Read More
Culture

Mark Zuckerberg Is Right

Mark Zuckerberg clearly hasn’t gotten the memo. The founder of Facebook persists in defending free expression, even though free speech has fallen decidedly out of fashion. His reward for adhering to what once would have been a commonsensical, if not banal, view of the value of the free exchange of ideas ... Read More