Replacing Obamacare’s subsidies for the poor is no easy task

The opposition

AS REPUBLICAN congressmen were berated by constituents this week for their desire to repeal the Affordable Care Act (see Lexington), wonks in Washington continued to work on a replacement. Paul Ryan, the Speaker of the House, has promised a health-care bill soon after politicians return from their districts on February 27th. If they are to cool the protesters’ zeal, Republicans must keep health insurance affordable for everyone who already has it. That means deciding what to do about the subsidies Obamacare gives to 10m low- and middle-earners who buy coverage through government-run websites. Mr Ryan promises to replace the law’s means-tested tax credits with a discount for everyone, varying not with income but with age. Would such a switch work?

Republicans have always hated the ACA’s handouts. Because they shrink if people earn more, they discourage toil. The Congressional Budget Office has estimated that Obamacare reduces the total number of hours…Continue reading
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