The head of a think tank popular with many Republican health policymakers has come out with a proposal for replacing the Patient Protection and Affordable Care Act (PPACA) commercial health insurance provisions.

Sally Pipes, president of the Pacific Research Institute (PRI), has published The Way Out of Obamacare. Her team is promoting the book as “an actionable blueprint” for replacing PPACA with market-based programs.

She says the country should:

  • Use refundable age-based tax credits to help people pay for health coverage.

  • Increase use of health savings accounts (HSAs).

  • Use a combination of vouchers and block grants to improve Medicare and Medicaid.

When a low-income, low-tax worker qualifies for a refundable tax credit, and the size of the refundable credit is bigger than the worker’s general income tax bill, the Internal Revenue Service (IRS) pays the worker for the difference between the tax credit and the general tax bill.

Pipes notes in the section on refundable tax credits that lawmakers who have proposed refundable tax credit measures in the past include Rep. Tom Price, R-Ga.; Sen. Marco Rubio, R-Fla.; and former Florida Gov. Jeb Bush.

See also: Ben Carson proposes a universal HSA program

“The federal government should distribute the credits directly to individuals instead of giving them to insurance companies, as Obamacare does,” Pipes says. 

That way, Pipes says, if consumers end up buying cheap coverage and having tax credit money left over, they can put the money in HSAs.

Basing the size of the tax credit on age, rather than income, would eliminate the guesswork now involved when workers applying for the PPACA advanced premium tax credit (APTC) exchange plan subsidy predict how much they will earn in the coming year, Pipes says.

A refundable tax credit would be fairer to low-income people than a uniform, standard tax credit would be, because low-income people would get as much in cash and savings from a refundable tax credit as higher-income people would, Pipes says.

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