The GOP is ramping up discussions on tax-related proposals to improve healthcare as an alternative to the Affordable Care Act.
“Many provisions in our tax code have made it difficult for Americans to access the healthcare they want and need,” said Rep. Pat Tiberi (R-Ohio), chairman of the House Ways and Means Committee's health subcommittee, in announcing a hearing this week on the topic. At an April hearing, legislators heard from analysts who suggested capping the tax exclusion on premiums for employer-sponsored health insurance.
Joseph Antos, with the right-leaning American Enterprise Institute, said the exclusion was expensive, unfair and inefficient. “It encourages workers to buy generous insurance that offers lower cost-sharing but higher tax-free premiums,” he said in written testimony. “Such coverage makes consumers less price-sensitive and promotes the use of medical services, some of which may provide little value.”
A GOP task force dedicated to finding a viable ACA alternative is considering the tax exclusion, aides said. Other proposals include more robust health savings accounts, allowing insurance to be sold across state lines and high-risk pools.
Avik Roy, senior fellow with the conservative Manhattan Institute, agrees with a cap on the tax exclusion and said it should be phased in gradually. He also advocated for eliminating the Cadillac tax on high-end health insurance plans and providing means-tested tax credits for individuals to buy insurance.
Stephen Kreisberg, director of research and collective bargaining services at the American Federation of State, County and Municipal Employees union, however, said a cap would undermine the quality of insurance plans and put employees of small businesses at a disadvantage.