December 9, 2015
Individual tax credits to help pay for healthcare expenses have long been a mainstay of conservative healthcare reform. Whether solely as premium supports or as a combination of premium and HSA credits, the idea of giving people money to purchase healthcare or health insurance is a core pillar of any serious conservative healthcare reform. And it looks like Hillary Clinton might be embracing the tax credit approach. In a recent proposal (which is incomplete thus far), the presidential candidate offered support for a tax credit to help pay for out-of-pocket costs. While this might be pure politics to distinguish herself from Bernie Sanders’ single-payer proposals, the idea has serious merits.
Under the ACA, those who enroll on the exchanges can receive premium tax credits along with cost-sharing assistance. But rather than provide actual tax credits for out-of-pocket expenses, those with incomes below 250% of the federal poverty line are provided with “cost-sharing reduction” subsidies that reduce copays and deductibles (importantly, these benefits are only offered to those with silver-level plans).
This arrangement means that the poor can often purchase extremely generous coverage for less than a hundred dollars after accounting for premium subsidies. But that’s where the benefit ends. The CSRs become much less valuable for those with incomes over 200% of the federal poverty line ($48,500 for a family of four), doing little to help with out-of-pocket expenses. This is likely one of the reasons that nearly 70% of enrollees have signed up for silver-tier plans, but also why enrollment sharply tapers off above 200% of FPL.
Read the full article at Forbes.com: Hillary Clinton: The Conservative Obamacare Reformer