As president, he signed into law a bill that violates both of these promises. The Affordable Care Act (ObamaCare) gives the federal government the authority to tell every American what insurance they must have, where they will get it and what they will pay for it. Moreover, even as it violates another campaign promise ("if you’re in a plan you like, you can keep it"), the most optimistic estimate expects 23 million people will remain uninsured once the new health reform law is fully implemented.
Now that the Supreme Court has declared the mandate constitutional, what’s next? Mitt Romney says "repeal and replace." But what should we replace ObamaCare with? Republicans on Capitol Hill are being way too timid. They are endorsing only modest reforms that will not solve the more fundamental problems of cost, quality and access to care.
Here is my suggestion: Return to the two original ideas Obama said he was for: universal coverage without a mandate. How can that be done? Ironically, the first step is to consider a health policy idea proposed by Obama's presidential opponent, John McCain.
The Current System . Most people who purchase private insurance today benefit from federal tax subsidies that total about $300 billion a year. Yet the system is completely arbitrary and unfair. The amount of tax subsidy any particular individual receives depends upon whether the insurance is obtained through an employer, what options the employer offers, the family's tax bracket, and other factors. For a middle-income family facing a 25 percent federal income tax rate, a 15.3 percent Federal Insurance Contributions Act (FICA) tax and a 5 percent state income tax rate, the ability of an employer to pay premiums with pre-tax dollars is a subsidy worth 45.3 percent. Government is efficiently paying almost half the cost of the insurance.
Because the amount of subsidy depends on the employee’s tax bracket, the largest subsidies are given to people who need them least. In addition, the system encourages waste. The more expensive the insurance, the larger the subsidy. Also, since most of the uninsured do not have access to employer provided coverage, they get little or no tax rebate when they purchase insurance on their own.
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