(Bloomberg View) — There's good reason for Congress to remodel some aspects of Obamacare. More than half of people who get health coverage through the insurance exchanges have high out-of-pocket costs, for example; 1 in 10 say they've gone without medical care because of the expense.
Unfortunately, the congressional proposal getting attention at the moment — from Republican Rep. Tom Price of Georgia — wouldn't fix these problems. And it would do away with parts of the law that are working well.
See also: 4 PPACA individual mandate alternatives
The truth is, people are surprisingly happy with the coverage they're buying on the exchanges, according to a recent survey from the Henry J. Kaiser Family Foundation. Three in 4 consider their policies excellent or good, and they like their choice of primary-care doctors and hospitals. Two-thirds also have found it easy to shop for plans, including figuring out whether they qualify for financial help. Perhaps most important to assessing how the Patient Protection and Affordable Care Act (PPACA) is working, two-thirds are satisfied with their monthly premiums.
Price's plan would undermine much of this success. It would close the state insurance exchanges and end income-adjusted subsidies. Policy buyers would still get help with the cost of their insurance, but it would come in the form of refundable tax credits, which would vary not by income but by age. (People 18 to 35 would get $1,200 a year; those 35 to 50, $2,100; and 50 or older, $3,000.)
The expressed goal is simplicity. Under Obamacare, if you underestimate your income and thus receive an excessive subsidy, you have to return some portion of it. Unsurprisingly, this causes widespread frustration at tax time. H&R Block estimated that two-thirds of people who bought coverage on an exchange had to repay an average of $729 this year. (The 25 percent who overestimated their income got an average refund of $425.)
