Coburn-Ryan Health Bill Would Jeopardize Coverage for Many, While Failing To Reduce the Number of Uninsured Significantly
Summary
With President Obama’s call for greater inter-party cooperation on health reform, and his announcement that the White House will hold a health care “summit” on February 25, Republican alternatives to the House- and Senate-passed Democratic plans are now receiving more attention. One such alternative is the Patients’ Choice Act, which Senator Tom Coburn (R-OK) and Rep. Paul Ryan (R-WI) introduced last summer and which is similar in many respects to the health provisions in Rep. Ryan’s more recent Roadmap for America’s Future.[1] Unfortunately, the Coburn-Ryan plan would likely make comprehensive, affordable coverage less available to many who now have it while failing to significantly reduce the number of uninsured Americans.
Plan Would Significantly Erode Employer-Based Coverage
The bill (S. 1099 and H.R. 2520) would eliminate the main federal tax subsidy for employer-sponsored insurance — the income-tax exclusion for employer-sponsored insurance — and replace it with a refundable tax credit ($2,290 for individuals and $5,710 for families) that people could use to purchase coverage.[2] Many employers would almost certainly drop coverage as a result: since individuals could get the tax credit regardless of whether they obtained their coverage through their employer or on their own, many employers likely would conclude they no longer needed to provide coverage. (In contrast, capping rather than eliminating the tax exclusion, as the Senate Finance Committee has considered, can maintain substantial incentives for employers to continue to offer coverage.)
Even employers who wished to continue offering coverage might be unable to do so. As explained below, the new tax credit would encourage younger, healthier employees to opt out of employer-based plans, leaving older and sicker workers in the employer insurance pools and thereby driving up the cost per beneficiary of employer coverage. Many employers might ultimately conclude they could not afford to continue offering subsidized coverage.
Plan Fails to Create a Viable Alternative for People Losing Employer Coverage
Of particular concern, many of the people who would lose employer-based coverage would likely be unable to find affordable, comprehensive coverage on their own. The bill fails to address the significant shortcomings of the existing individual health insurance market that make it difficult for individuals who are older or have various medical conditions to obtain coverage.
http://www.cbpp.org/cms/?fa=view&id=2879
= new reply since forum marked as read
