Obamacare vs. Romneycare

As we gain momentum towards the coming presidential election one of the main topics is the state of America’s healthcare. If you follow politics you are well aware of the Affordable Healthcare Act a.k.a. Obamacare. This proposed law is currently under review by the US Supreme Court. What no one seems to be talking about is what the Republican Party is proposing to reform or improve America’s healthcare.

First let’s review the proposed changes to our current healthcare system under Obama’s Affordable HealthCare Act:

• Prohibiting health insurers from refusing coverage based on patients' medical histories
• Prohibiting health insurers from charging different rates based on patients' medical histories or gender
• Repeal of insurance companies' exemption from anti-trust laws
• Establishing minimum standards for qualified health benefit plans
• Requiring most employers to provide coverage for their workers or pay a surtax on the workers wage up to 8%
• Restrictions on abortion coverage in any insurance plans for which federal funds are used
• An expansion of Medicaid to include more low-income Americans by increasing Medicaid eligibility limits to 133% of the Federal Poverty Level and by covering adults without dependents as long as either or any segment doesn't fall under the narrow exceptions outlined by various clauses throughout the proposal.
• A subsidy to low- and middle-income Americans to help buy insurance
• A central health insurance exchange where the public can compare policies and rates
• Allowing insurers to continue to dictate limits on evaluation and care provided consumers by their physicians ("managed" or "rationed" care)
• Avoidance of captivating or regulating premiums which are routinely and in accordance with this law, charged by an insurance company for coverage, which might make the coverage non-affordable vis-a-vis a consumer's income
• Requiring most Americans to carry or obtain qualifying health insurance coverage or face a fine and/or prison term for felony non-compliance.
• A 5.4% surtax on individuals whose adjusted gross income exceeds $500,000 ($1 million for married couples filing joint returns)
• A 2.5% excise tax on medical devices
• Reductions in projected spending on Medicare of $400 billion over a ten-year period
• inclusion of language originally proposed in the Tax Equity for Domestic Partner and Health Plan Beneficiaries Act
• Inclusion of language originally proposed in the Indian Health Care Improvement Act Amendments of 2009.
• Imposing a $2,500 limit on contributions to flexible spending accounts (FSAs), which allow for payment of health costs with pre-tax funds, to pay for a portion of health care reform costs.

 Now that you have a clear understanding of the Affordable Care Acts proposed changes let’s look at what Mitt Romney is proposing. The main change is how Americans will receive their healthcare at work. Currently employed Americans (whose employer offers health insurance) get a tax break because the health benefits are not taxed. Likewise the employers (businesses) that offer this healthcare to their employees receive a tax break as well because their contributions to the healthcare plan are not taxed. Under Romney’s proposal American citizens would receive a tax break to purchase their own independent health insurance. Proponents of this plan say that this will bring the benefits of competition back to healthcare and give consumers more choices. People would be able to purchase what they want and not just what their employers want to provide. Another good point from proponents is the fact that our current system discriminates against those seeking health insurance that do not work or are not provided health insurance by their employer. Critics believe this would involve more risk for people and leave a large amount of Americans without health insurance.

Although we do not have the details on “Romneycare” as we do with Obamacare (Romney has only given outlines of the plan compared to the written law proposed by Obama) the main changes are as stated: receiving a tax break to purchase health insurance individually (outside of your employer); provide strong incentives for companies to not offer insurance to employees; reform the current healthcare law’s by changing the tax laws and bringing free-market competition to our healthcare system. If the Affordable Healthcare Act is shut down and Romney is elected I would not be surprised to also see some of the more popular aspects of this law incorporated into Romney’s plan.

As an Obama supporter I must say I am intrigued by Romney’s ideas. I believe in the Conservative view that the tax law needs to be revised to bring competition to the healthcare system and this is essential if you are going to achieve any kind of healthcare reform. As with any market, competition will provide more beneficial options and pricing on health insurance for the consumer.