Some incremental changes to the existing system:
- Instead of a tax deduction for employer plans, a tax credit equal to 90% of the first $5,000 per employee plus 80% of the next $2,500, and a deduction for the rest. Employees would pay no tax on the benefit, if only because there is no easy way to calculate the value of an individual’s benefits.
- Give the same deal to individuals (including the self-employed) whose employers do not provide health insurance.
- Create a Federal pre-existing condition reinsurance company that will pick up the cost of insuring whatever pre-existing conditions the Government wants to mandate be covered. The reinsurance would be free, so the cost of covering pre-existing conditions can be ignored by private insurers in setting premium rates. That will reduce those rates even further.
- Increase corporate and personal income taxes to cover the cost of these subsidies. In other words, move the cost from customers to taxpayers. They’re the same people, but the opportunity to avoid the cost by buying foreign goods will disappear.
See? How hard was that?