Rubio’s Health Plan Has an Individual Mandate

Trump has disavowed his support for an individual mandate. Will Rubio do the same?
February 25, 2016 • Commentary
This article appeared on National Review (Online) on February 25, 2016.

When Republican presidential front‐​runner Donald Trump momentarily embraced Obamacare’s individual mandate before disavowing it, Rush Limbaugh and other conservatives caught the vapors. But where is conservative outrage over Marco Rubio’s health plan, which actually contains an individual mandate?

Rubio, unlike his opponents, has offered details on how he would replace Obamacare. (Trump merely promises “something terrific.”) He builds his replacement plan around an individual mandate, and an expansion of Obamacare’s spending. Rubio’s plan is so similar to Obamacare, so disruptive, and so easily demagogued, you would think he was a Democratic mole.

The centerpiece of Rubio’s proposal would “provid[e] every American with an advanceable, refundable tax credit that can be used to purchase insurance.” What does that mean? If you purchase a government‐​approved health plan, you could save, for example, $2,000 on your taxes. If you don’t, you pay that $2,000 to the government.

That is exactly how Obamacare’s individual mandate works. No less an authority than John Goodman, the dean of conservative health‐​care reformers, says tax credits are a “financial mandate” to purchase health insurance.

Rubio’s tax credit would thus give the federal government as much power to force you to purchase unwanted coverage as Obamacare does. Under Obamacare, the federal government gets to decide what coverage you must buy in order to avoid the penalty. Under Rubio’s plan, the federal government would have the same power.

For many Americans, Rubio’s mandate could be more punitive than Obamacare’s. Rubio hasn’t specified the precise penalty he would make you pay the IRS if you failed to purchase a government‐​approved plan, but other tax‐​credit proposals would create penalties that rival Obamacare’s.

The similarities to Obamacare don’t end there.

Rubio’s tax credits, like Obamacare’s, are “refundable.” That means that if your tax liability is zero, you get a $2,000 check from the government. Obamacare’s so‐​called “tax credits” are actually 80 percent government spending. Rubio’s plan takes this concept and expands it to 10 or 20 times as many people as Obamacare does.

As if that weren’t bad enough, Rubio’s plan involves unnecessary tax increases and fails to protect workers, features that Democrats will demagogue ruthlessly.

Commendably, Rubio tries to make health insurance more secure by eliminating the tax preference for employer‐​sponsored insurance. But his approach is ham‐​handed and self‐​defeating. Rather than cut taxes for everyone, he would level the playing field by taxing many workers’ health benefits.

Perhaps most troubling is that, even though employers could respond to his plan by dropping their health benefits, Rubio would do nothing to return to workers the money their employers spend on their health benefits. For workers with the average family plan, that’s $13,000 of their earnings that Rubio does nothing to try to put into the worker’s hands immediately. As a result, Democrats will demagogue Rubio’s plan exactly the way Barack Obama demagogued John McCain’s tax‐​credit proposal in 2008.

Republicans have an alternative that would avoid these pitfalls. Expanding tax‐​free health savings accounts would move in the opposite direction of Obamacare by reducing health‐​care costs, making health insurance more secure, and delivering an effective tax cut of $9 trillion over ten years. That’s larger than all the Reagan and Bush tax cuts combined. “Large” HSAs would also allow more secure insurance products—innovations that Rubio’s tax credit would block.

Were it not for Donald Trump, Marco Rubio’s individual mandate might be the most ridiculous thing happening in the Republican party this campaign season. Even as every Republican candidate for national office promises to repeal and replace Obamacare, the favorite candidate of both the GOP establishment and the “reformocon” class of conservative intellectuals is promising to cement many of Obamacare’s worst features in place — including its least popular provision — by giving them a conservative imprimatur.

Republicans may not have noticed the similarities between Rubio’s health plan and Obamacare, but Democrats certainly will. If the GOP’s presidential candidate marches under the banner of health‐​insurance tax credits, this will be the second presidential election in a row in which Republicans have denied voters a clear choice on Obamacare by nominating a candidate who has zero credibility as an Obamacare critic. Democrats will expose the hypocrisy, and voters will rightly dismiss Republican criticisms of Obamacare as a partisan charade.

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