NCPA - National Center for Policy Analysis


June 22, 2009

"Having the government compete against the private sector is kind of like my seven-year-old daughter's lemonade stand competing against McDonalds," Congressman Paul Ryan (R-Wis.) said on Fox News Sunday.

Ryan argues that providing every American with a tax-free voucher specifically for the purchase of health insurance not only levels the playing field, but puts consumers in the position to make the health care choices that make sense to them.

  • The Midwest lawmaker's Roadmap plan allows every American except those eligible for Medicare or military health care the option to receive a $2500 refundable tax credit for individuals and $5000 for families.
  • The individual or family could apply the tax credit either to the purchase of an employer-sponsored plan or to another option that suits the individual/family.
  • Employers who continue to provide health coverage can continue to claim contributions as a business expense deduction.

Ryan would retain the itemized 7.5 percent deduction for medical expenses for those who do not claim the new health care tax credit described above.

The congressman would also allow individuals to utilize the refundable tax credit toward the purchase of health insurance in any state.  This is probably the most controversial part of the Ryan bill, says Wes Vernon, a Washington-based writer and veteran broadcast journalist.

Ryan's own state of Wisconsin has insurance regulations that are more favorable than most, and as one business leader in the state has said, "Health plans sold in Wisconsin but regulated in other states are not in the best interests of Wisconsin businesses and consumers."  Obviously, a lot of disentanglement would have to take place there involving regulations that have taken root over the years in all 50 states, says Vernon, but this is an idea worth considering. 

Source: Wes Vernon, "Socialized medicine--Part 5: There is hope yet, Americans not enthralled with Obamacare,", June 22, 2009.

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