April 21 2015
One News Now
Republicans are eyeing tax credits in the event the Supreme Court strikes down health insurance subsidies in King v. Burwell. One health policy expert disputes arguments that the GOP's plans really don't offer anything new.
The issue in King v. Burwell is whether the IRS can decide unilaterally to have subsidies going out to every state in the country, even though the Affordable Care Act limits subsidies to states that set up their own exchange. A majority of states opted to have the federal government run an exchange.
If the Supreme Court rules against subsidies in federally operated exchanges, Congress and the White House will need to come up with changes. Reuters reports that Republicans hope to deliver on their promise to offer an alternative healthcare plan. Two Republican options include a refundable tax credit – something critics say amounts to "ObamaCare Lite" and is virtually the same thing as the ObamaCare tax subsidy being challenged before the Supreme Court.
Hadley Heath Manning, director of health policy at the Independent Women's Forum, rejects the notion that Republican healthcare plans are very similar to ObamaCare.
"When it comes to these tax credits or subsidies for health insurance, there are big differences in how conservatives generally would propose to implement them," she explains. "The main difference, to simplify things, is Who makes decisions? Who determines how that subsidy or tax credit can be applied? Conservatives generally believe that individual actors, consumers and families in the private market can make decisions about how to use that money better than the government can decide how to use that money."
Manning compares the legal issue in question to how government subsidies are distributed in America's education system.
"The government is very heavily involved in subsidizing education when it comes to public schools," she begins. "Public schools are kind of similar to the ObamaCare idea because, instead of the subsidies going to individuals they go directly to the schools, or [in this case] to the health insurance companies.
"So the government is essentially sending the subsidies right now to health insurance companies, or schools, on behalf of individual consumers. The conservative idea is that people know best how to spend those dollars."
Even if those monies ultimately pass through government as subsidies or as tax credits, Manning says putting them in the hands of individuals – much like an education voucher – would allow people to choose the health insurance plan that is right for them.
"And it doesn't include a lot of requirements based on what the government thinks should be in your health insurance plan," she concludes.