Replacing Obamacare: Cost-sharing is caring
The paroles of replacing Obamacare's subsidies for the poor.
As republican congressmen were berated by constituents this week for their desire to repeal the Affordable Care Act , 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 worked by 1.5-2%, which is equivalent to 2.5m full-time jobs by 2024.
Making tax credits universal would lessen that number.
And because the old pay more for health insurance than the young—a gap that will widen if the Republicans loosen restrictive pricing regulations—increasing subsidies with age makes some sense.
Such a tax credit, though, would not be generous enough for all buyers.
The average Obamacare subsidy adds up to about $3,600 per person.
Many receive much more.
Two non-smoking 55-year-olds together earning $56,500, the median household income, get $4,800 each just to help pay for premiums, according to the Kaiser Family Foundation, a think-tank.
According to The Economist's calculations, if Mr Ryan spread the cash around all 22m Americans who buy health insurance directly, rather than through their employer, it would average only about $2,000 each.
That is close to what Tom Price, the new health secretary, proposed in 2015 for 35-to 49-year-olds (older folk would have got $3,000).
Republicans say it is enough, because costs will fall once insurance is deregulated.