A solution to the individual mandate

I was part of an email discussion this morning on alternatives to the individual mandate. Here’s an idea: why not just implement a phased in tax increase (equal to the mandate penalty) for all Americans, and simultaneously implement a $695 tax credit for everyone who buys insurance. This would be, in effect, the same as a $695 penalty for not buying insurance. The difference is that raising taxes and giving tax credits for buying things is clearly not unconstitutional.

Why didn’t the administration just make this part of the tax deal currently being pushed? Problem solved.

UPDATE by Austin: For more details on the size of the ACA tax penalty, see this prior post. It isn’t $695 in all cases. Still, it could have been implemented as Aaron suggests.

Aaron Carroll

Aaron E. Carroll, MD, MS is co-Editor-in-Chief of The Incidental Economist and tweets at @aaronecarroll. He is the Chief Health Officer at Indiana University. He is also a Distinguished Professor of Pediatrics and Associate Dean for Research Mentoring at the Indiana University School of Medicine. In addition to contributing regularly to The New York Times and the Atlantic, he is the author of four books, most recently The Bad Food Bible.

Hidden information below

Aaron Carroll

Aaron E. Carroll, MD, MS is co-Editor-in-Chief of The Incidental Economist and tweets at @aaronecarroll. He is the Chief Health Officer at Indiana University. He is also a Distinguished Professor of Pediatrics and Associate Dean for Research Mentoring at the Indiana University School of Medicine. In addition to contributing regularly to The New York Times and the Atlantic, he is the author of four books, most recently The Bad Food Bible.

The Incidental Economist

the health services research blog

Boston-area website management by BKJ Productions
Editors In Chief
Managing Editor

Work posted here under copyright © of the authors • Details on the Site Policies page

Subscribe

Email Address*