Age-Adjusted Tax Credits

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Voluntary Health Reform >> Age-Adjusted Tax Credits (last updated 2.26.17)

Overview

These plans generally provide for age-adjusted fixed tax credits in the nongroup market for individuals and small businesses (replacing the tax exclusion for employer health benefits for the latter groups and typically capping the exclusion for larger employers). Some plans make these universal, i.e., replacing the tax exclusion entirely for all employers; some plans couple this with reform of Medicaid and Medicare. The proposals included on this page exclude proposals in which tax credits would vary by age and some other factor, including Age-Related Geography-Adjusted Tax Credits

Legislative Proposals

Empowering Patients First Act (Price)

Other Proposals

Listed in reverse chronological order.

A Better Way (House Republicans)

Improving Health and Health Care: An Agenda for Reform (AEI Scholars)

  • History. This was proposed by a group of scholars at the American Enterprise Institute (AEI) on 12.9.15.
  • Full Text. Joseph Antos, James C. Capretta, Lahnee J. Chen, Scott Gottlieb, Yuval Levin, Thomas P. Miller, Ramesh Ponnuru, Avik Roy, Gail Wilensky, and David Wilson. Improving Health and Health Care An Agenda for Reform. AEI: December 2015.
  • Summary. Key provisions of this proposal include advanceable and refundable tax credits for the purchase of insurance, a default enrollment option, protection from underwriting for those who maintain continuous coverage, fixed per-capita payments for Medicaid, and one-time tax credit for health savings accounts (HSAs) among many others. Tax credits would be age-adjusted (age-adjusted (4 groups: 0-17, 18 to 34, 35 to 49, and 50 and over).
  • Analysis. The Center for Health and Economy scored this proposal on 2.19.15. Relative to the ACA, the plan is projected to lead to 16 million more insured persons by 2025; the insurance coverage provisions of this proposal will lead to budget outcome of a $350 billion budget surplus over 10 years; various Medicare reforms are expected to produce $1,559 billion in savings in the first 10 years.

The Conservative Plan for 21st Century Health (Jeb Bush)

  • History. This was proposed on 10.12.15 by former Gov. Jeb Bush as part of his presidential campaign.
  • Summary. This plan would repeal the ACA entirely and replace it with a plan that includes universal age-related (no categories spelled out in proposal) tax credits that are advanceable and refundable for those who do not have an offer of employer-sponsored coverage, a cap on the tax exclusion for employer-provided coverage (the cap would be $12,000 a year for an individual and $30,000 for a family), and block-granted Medicaid. States would be principally responsible for determining eligibility and benefits for low income Americans as well as providing some sort of transition coverage to the 17 million who have gained coverage under the ACA.

Day One Patient Freedom Plan (Walker) 

  • History. Proposed on 8.18.15 by Gov. Scott Walker  (who dropped out of the presidential race on 9.21.15). 
  • Summary. This plan would repeal the ACA entirely and replace it with a plan that includes age-related tax credits for private insurance (4 groups: 0-17, 18 to 34, 35 to 49, and 50 to 64) to all in the nongroup market as well as employees of firms with less than 50 full time equivalent employees. The tax exclusion for employer sponsored health insurance is capped at the 75th percentile of annual employer sponsored insurance premiums. Medicaid would be reformed, including a capped block grant to remove perverse incentives for overspending.
  • Full Text. Walker, Scott. The Day One Patient Freedom Plan. My Plan to Repeal and Replace Obamacare.
  • Analysis.
    1. Anderson, Jeffrey. Scott Walker Takes Dead Aim at Obamacare, The Federalist (8.18.15)
    2. Miller, Thomas. Walker’s first pitch against Obamacare: A high hard one. AEIdeas 8.18.15.

A Winning Alternative to Obamacare (Anderson)

  • History. Released 2.10.14 by Jeffrey Anderson at The 2017 Project.
  • Summary. This plan would repeal the ACA entirely and replace it with a plan that includes age-related tax credits for private insurance (4 groups: 0-17, 18 to 34, 35 to 49, and 50 to 64) to those in the nongroup market as well as employees of firms with less than 50 full time equivalent employees. The tax exclusion for employer sponsored health insurance is capped at the 75th percentile of annual employer sponsored insurance premiums. Medicaid would be overhauled.
  • Analysis. The Center for Health and Economy released an analysis of this proposal in terms of budget impact/coverage etc. on 9.8.14.

Universal Tax Credits (Goodman/Ferrara)

Note that this proposal only uses two age categories (child and adult), so in that regard is more similar to fixed tax credit proposals than the foregoing proposals which provide