Wisconsin governor and 2016 GOP presidential hopeful Scott Walker is out today with his version of an Obamacare “repeal and replace” plan. No doubt all the serious candidates will have their own before primary season is over.
The most important part of the Walker plan is the first section, which completely repeals every jot and tittle of Obamacare. For taxpayers, that means repealing the 20 new or higher taxes in Obamacare. Right away, this plan is a large net tax cut as a result.
The plan also creates refundable tax credits for people on the individual health insurance market, uncapped by income but variable by age. The older you are, the bigger a tax credit you get. This reflects what health care actually costs for people as they age. The individual tax credit would be paid for by a very high cap on the tax-excluded value of employer-provided health insurance.
Walker’s plan also creates a $1000 tax credit “bonus” for new people opening health savings accounts (HSAs), raises HSA contribution limits, and allows for greater HSA portability.
It makes sense that the insurance plan options these tax credits will apply toward will be cheaper than today, as Obamacare’s costly restrictions and mandates are lifted.
Finally, the Walker plan begins to break down the barriers for people buying health insurance across state lines, allows consumers to pool together to purchase health insurance, gives states incentives to enact medical malpractice reform, and gives Medicaid a new mission by splitting it into several smaller goals for states to manage.
The Walker plan is a net tax cut, a net spending cut, and is intended to be budget neutral. It joins several other good Obamacare replacement plans out there, including the House Republican Study Committee plan, the plan advanced by Congressman Tom Price (R-Ga.), and the Burr-Hatch-Upton plan. No doubt more will join in the fun.