Enter Paul Ryan. Late last month, the five‐term Wisconsin congressman introduced a comprehensive blueprint for reforming taxes, entitlements, retirement and health care. If Republicans are looking for a road out of the political wilderness, they should pay attention.
Health Care: Ryan would reform our employment‐based insurance system by replacing the current tax exclusion for employer‐provided insurance with a refundable tax credit of $2,500 for individuals, and $5,000 for families. This would encourage employers to take the money they currently spend providing health insurance and give it directly to workers, who could then use it to purchase competitive, personally owned insurance plans. That would be insurance that met their needs, not those of their bosses, and people wouldn’t lose it if they lost their jobs.
Ryan would also allow workers to shop for insurance across state lines.
That would mean residents of states like New Jersey and New York, where regulation has made insurance too expensive for many people, could buy their insurance in states where it cost less. And increased competition would help bring insurance costs down for all of us.
Medicare: Rep. Ryan recognizes that the skyrocketing cost of Medicare is threatening to bury our children and grandchildren under a mountain of debt. He would modernize the program, giving seniors more freedom to get the type of coverage that fits their needs, while bringing costs under control. He would give every senior an annual payment of up to $9,500 that they could use to purchase health insurance. The payments would be inflation protected and adjusted for income, with low‐income seniors receiving greater support. Seniors would be able to save some of their funds in a Medical Savings Account.
Social Security: Like Medicare, Social Security is hurtling toward insolvency. Rep. Ryan would preserve the program unchanged for current recipients and workers older than age 55, but he would allow younger workers to invest part of their Social Security taxes privately through personal accounts. Unlike the present system, workers would own the funds in their accounts, and when they died, they could pass any remaining funds on to their heirs.