Marco Rubio Proposes Refundable Tax Credits to Replace ObamaCare

Molly Riley/AP
Molly Riley/AP

For some reason, The Hill needles Senator Marco Rubio’s proposal for replacing ObamaCare for “largely repeating talking points from a previous op-ed six months ago.”

Isn’t that a positive sign of intellectual consistency? Heck, at this point in the roller-coaster presidential primary, six months might be a gold-medal contender for longest-lived candidate policy proposal.

At any rate, what Rubio outlines in his new op-ed is an ObamaCare repeal program quite similar to Wisconsin Governor Scott Walker’s new plan. (Or, since Rubio’s repeating six-month-old talking points, perhaps you could say Walker is following in Rubio’s footsteps. One suspects the gentlemen from Wisconsin and Florida will discuss the matter at their earliest debate opportunity.)

Rubio’s plan has three major points.

“First, I will work with Congress to create an advanceable, refundable tax credit that all Americans can use to purchase health insurance,” he writes.

The value of these credits should increase every year, and we should set the tax preference for employer-sponsored insurance on a glide path to ensure that it will equal the level of the credits within a decade. This will prevent large-scale disruptions and reform a provision in our tax code that has been driving up health costs, hurting those who are self-employed and preventing Americans from having truly portable health insurance plans that travel with them regardless of where they work.

This is very similar to the key component of Walker’s proposal, although Rubio is more clear, at least in the current iteration of the two plans, that he wants the value of the tax preferences for employer-paid insurance to match up with the tax credit for individual insurance purchases. It sounds as if Rubio wants to decouple insurance from employment more than Walker does.

As with the plans advanced by Walker – and another GOP presidential rival, Louisiana Governor Bobby Jindal – Rubio’s second point advocates reforming insurance regulations to bring costs down, remove the silly restrictions on selling insurance across state lines to create a national marketplace, and encourage “consumer-centered products like Health Savings Accounts.”

Walker provides a $1,000 incentive for those who establish HSAs. Rubio mentions no such specific incentive, but he’s more adamant about nixing bailout schemes: “Under no circumstances should taxpayers be asked to bail out an insurance company that loses money, as is currently the case under ObamaCare.”

Rubio’s third point is to reform Medicare and Medicaid, the latter with a “per-capita block grant system,” which would seem in harmony with other proposals to move away from matching state funds – which can give state programs an incentive to spend more, in order to get more from Washington.

He advocates a premium support system to replace Medicare for young people as they enter the system, with current beneficiaries kept in the current system without changes. “A premium support model will empower seniors with choice and market competition just like Medicare Advantage and Medicare Part D already do,” Rubio writes.

The Hill notes that Rubio’s premium-support model is similar to one “widely touted by House Ways and Means Committee Chairman Paul Ryan,” who was also the GOP vice-presidential candidate in 2012.

He’s not shy about discussing the contrast between his approach and the Affordable Care Act: “Unlike ObamaCare, my reforms will not be forced through Congress in the dark of night without accountability. They will not stretch the Constitution to its breaking point or rely on questionable Supreme Court decisions to survive. And, perhaps most importantly, they will not raise taxes on the American people.”

Rubio’s proposal will likely draw the same criticism from Jindal that Walker’s did, because it relies upon refundable tax credits, which Jindal thinks are too easily abused, and too much of a middle-class welfare system. Jindal’s preference is to separate the truly needy and address their health care with carefully monitored benefit programs and premium supports, while moving the vast working population into a freer, cheaper, more efficient marketplace where direct government support is unnecessary.

It’s difficult to compare the three plans because they’ve been presented with such varying levels of detail – an op-ed from Rubio, a pamphlet from Walker, and a hefty booklet from Jindal, prepared almost a year and a half ago. It will be interesting to hear what each candidate has to say about the others’ plans, if they get a chance to clash on the debate stage.


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