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Friday, November 5, 2010

On the Republican "Alternatives"

With the glow of victory still fresh, it’s a little unseemly to start criticizing the Republicans already on their proposals to replace Obamacare.

But we would not be in the fix we are today if a previous Republican regime had reformed (or eliminated) the employer-based exclusion of health benefits from taxable income. Or, to put it in other words: The federal government should give the American people the health-care dollars that it currently gives our employers.

Republican leaders really muddy this issue.  To wit: Karl Rove's advice in yesterday's Wall Street Journal.

Read the entire post at National Review Online.

1 comment:

Bart said...

I can remember Robert Moffit at Heritage talking about the employer tax exclusion on This Week with David Brinkley, back in 1993 when Hillarycare was still looming. But I have yet to see any real progress in this area.

To get the ball rolling, we need better analysis of the status quo, with emphasis on the lysis. I'd start by breaking out the various facets of the tax exclusion, such as:
a) The tax break is tied to employer-sponsored coverage
b) The tax break is tied to ERISA/HIPAA compliant coverage, which is essentially guaranteed issue (within limits) and uses modified community rating.
c) The tax break is regressive and its size is purely an accident of an individual's tax bracket, rather than some deliberately chosen value.

If considering the tax exclusion in the light of possible alternatives, we can further break it down into:
1) What to do with people who currently benefit from the tax break, and
2) What to offer those who do not have employer-sponsored insurance.

The resulting 3x2 matrix of attributes and remedies might be a helpful tool for finding a politically feasible way out of the current mess. (No doubt the matrix could be expanded as other issues become important).

At the very least, this is one way to map out priorities or at least open them for debate. I suggest starting out by giving lowest priority to the impossible, and highest priority to that which is both possible and essential.