Avik Roy's "Universal Tax Credit Plan"
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The Universal Tax Credit Plan was released by conservative healthcare policy writer Avik Roy in 2016. Unlike other conservative proposals, the plan argued against repealing the Affordable Care Act, commonly known as Obamacare, in its entirety. The plan would maintain a system of tax credits and encourage the use of high-deductible health plans and health savings accounts. It would also lower restrictions on the premium rates and benefits that insurers must offer.
Text of plan
The following is a summary of Avik Roy's Universal Tax Credit Plan plan:
| “ | The plan has five core elements:
Premium assistance. The Plan repeals the ACA's individual mandate requiring most Americans to purchase government-certified health coverage. The Plan restores the primacy of state-based insurance markets and regulation. It expands the flexibility of insurers to design individual policies that are more attractive to consumers, because they are of higher quality at a lower cost. The Plan expands access to health savings accounts. Because these reforms lower the cost of insurance for younger and healthier individuals, they have the potential to expand coverage, despite the lack of an individual mandate. Employer-sponsored insurance reform. The Plan repeals the ACA's employer mandate, thereby offering employers a wider range of options for subsidizing workers' coverage. The Plan replaces the ACA's "Cadillac tax" on high-cost health plans with a capped standard deduction for employer-sponsored coverage. The plan repeals the ACA's other taxes, and proposes other reforms to regulations and statutes that artificially drive up the cost of employer-based insurance. Medicaid reform. The Plan migrates the Medicaid acute-care population onto the premium assistance program, with 100 percent federal funding and state oversight. (Medicaid acute care is a form of conventional insurance for hospital and doctor services.) In exchange, the Plan returns to the states, over time, full financial responsibility for the Medicaid long-term care population. (Long-term care funds nursing home stays and home health visits for the elderly and disabled.) This clean division of responsibilities will improve coverage for the poor; reduce waste and fraud; and provide fiscal certainty to state governments. Medicare reform. The Plan gradually raises the Medicare eligibility age by four months each year. The end result is to preserve Medicare for current retirees, and to maintain future retirees—in the early years of their retirement—on their individual or employer-sponsored health plans. (Today, the government does not allow the newly retired to remain on their old plans; instead, it forces them to enroll in Medicare or forfeit their Social Security benefits.) In total, these changes would make the Medicare Trust Fund permanently solvent. Veterans' health reform. The Plan overhauls the Veterans Health Administration, by giving veterans the option of private coverage and care via premium assistance, while improving traditional VA facilities. Medical innovation. The Plan removes regulatory barriers to the use of the internet, mobile devices, and digital technology in health care. It puts patients in control of their own medical records. It tackles the high cost of innovative medicines, by reforming the FDA regulatory process, and by introducing a more patient-centered, consumer-driven mechanism for keeping high prices in check. Other reforms. The Plan tackles the growing problem of hospital monopolies that take advantage of their market-power to charge unsustainably high prices. The Plan reforms malpractice litigation in federal programs.[1] |
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| —Avik Roy, Transcending Obamacare[2] | ||
Summary
Avik Roy's (R-Wis.) Universal Tax Credit Plan proposes a series of changes to the individual health insurance market, Medicare, and Medicaid. The plan is against a full repeal of the Affordable Care Act (ACA), arguing that a repeal would not receive the number of votes needed to pass and would disrupt health coverage in the individual market.[2]
The plan would maintain the ACA's ban on denying coverage for preexisting conditions, the law's four metal tiers of coverage (bronze, silver, gold, and platinum), and its prohibition on annual and lifetime coverage limits. A system of health insurance exchanges would remain in place, although these would not necessarily be state-run. The proposal would also preserve some of the ACA's premium rating restrictions by requiring insurers to charge the same premium amount regardless of gender or health status. Premiums could vary by age at a ratio of 6 to 1, meaning the oldest enrollees could be charged six times the premium amount of the youngest enrollees; the ACA's age rating ratio is 3 to 1. The plan also involves tax credits based on income, similar to those in the ACA, but limited to individuals earning incomes at or below 317 percent of the federal poverty level.[2]
Under the Universal Tax Credit Plan, the ACA's individual mandate would be repealed. Open enrollment for plans on the exchanges would occur for six weeks every two years, rather than annually as under the ACA. Individuals who did not select a plan during open enrollment would not be fined, but would not be protected from preexisting coverage denials or higher premiums. States could automatically enroll residents into a default health plan if they do not select one during open enrollment.[2]
The Universal Tax Credit Plan would encourage the use of consumer-directed health plans (CDHPs), which pair high-deductible health plans with health savings accounts (HSAs). The benchmark plan offered on the exchanges would be a CDHP with an annual deductible of $7,000 for individuals and $14,000 for families. Individuals with incomes below 250 percent of the federal poverty level would receive an extra tax subsidy to deposit in their HSA. The proposal would allow for greater flexibility in the ACA's "essential health benefits" that insurers are required to cover, lower the percentage of health costs that plans on the exchanges are required to offer, and repeal many of the ACA's taxes. The plan argues that these changes would lower premiums.[2]
The proposal would maintain the ACA's 40 percent excise tax on high-value health plans, known as the Cadillac tax. However, it would repeal the requirement that employers with 50 or more employees offer health coverage. Small employers would be able to pool together for the purposes of purchasing health insurance.[2]
The Universal Tax Credit Plan would also make changes to Medicaid and Medicare. The plan would seek to transition Medicaid enrollees who only need Medicaid for short episodes of care off Medicaid and into the individual market. For long-term care, the proposal would transfer full funding and administrative responsibility to states. Individuals who are dual-eligible for both Medicaid and Medicare would also be transitioned to the individual market.[2]
Under the plan, the Medicare eligibility age would raise by four months annually, a policy that would continue indefinitely. Medicare Parts A and B, which cover hospitalization and physician and outpatient services, respectively, would be combined under one deductible. Medicare enrollees could also opt out of the program and enroll in private coverage instead. The proposal would also amend veterans' healthcare by allowing veterans to enroll in private health coverage, with federal financial support to cover premiums.[2]
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See also
Footnotes
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