It is time to move past the debate over whether ObamaCare was a good
or a bad idea. I count myself as an ObamaCare supporter, but this
doesn't blind me to the law's flaws. Regardless of who wins the
presidential election, bipartisan compromise will be necessary to reform
health care in a constructive way.
The most important provisions of
ObamaCare are scheduled to take effect in 2014. I have been researching
ObamaCare and assisting with its implementation, and have come to this
realization: Without further reforms, the law will create unnecessary
costs for working-class Americans. ...
Conservative and liberal economists have long criticized the tax
exclusions for employer-sponsored coverage on the grounds that they
drive up health spending and provide far more tax benefit for
higher-income than for lower-income taxpayers. Sen. John McCain proposed
replacing these subsidies with better-designed tax credits when he ran
for president in 2008. Yet ObamaCare failed to reform these older
subsidies for employer-sponsored insurance.
ObamaCare's perverse incentives result
mainly from creating a mismatch between the subsidies for individual
health insurance and those for employer-sponsored insurance. Beginning
in 2014, lower-income Americans will be eligible for far greater
subsidies if they aren't offered employer-sponsored coverage, qualifying
them for the new subsidies available for individual insurance. In
contrast, higher-income taxpayers will be eligible for far greater
subsidies if they get employer-sponsored coverage.
To resolve these perverse incentives, we should adopt a variation of
Sen. McCain's proposals and replace the tax exclusions for employer
coverage with tax credits. To the extent possible, we should provide the
same subsidies for employer-based insurance as for individual