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The Obamacare Opportunity

An opening for a genuine alternative.

May 5, 2014, Vol. 19, No. 32 • By JAMES C. CAPRETTA and YUVAL LEVIN
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And a bolder step, like entirely replacing the tax exclusion for employer-based coverage with a credit, would risk stiff resistance from millions of American families and from their employers. In the 2008 presidential contest, Senator John McCain proposed such a complete replacement of the tax preference for employer-paid premiums and faced just such a backlash.

If conservatives embrace the general approach of guarding the employer system from serious shocks and making tax credits available to those outside of it they have an opportunity to highlight the costs and failures of Obamacare while beating that law on every measure that counts with voters. Independent estimates show that this kind of plan could increase enrollment in insurance just as much as Obamacare, with far less expense and without the burdensome regulations, high taxes, and badly misdirected Medicare cuts of Obamacare.

If, on the other hand, conservatives remain divided on how to proceed and do not coalesce to some degree around a viable and practical plan, it will be very difficult to make headway in rolling back Obamacare. The public is unhappy with Obamacare, but if Republican alternatives appear unserious, offer no clear path to reliable insurance for those who have struggled to secure coverage, or seem to promise uncertainty and dislocation for millions of insured families, then displacing Obamacare will become far more difficult.

Conservatives must not let that happen. At stake is not only the future of American health care but the larger struggle to define the relationship between American society and its government.

Conservatives have long argued that today’s welfare state is not only fiscally unsustainable but also profoundly dangerous to some crucial prerequisites for a thriving society, including a commitment to work, family formation, personal liberty, economic growth, and innovation. Obamacare doubles down on this approach, and therefore exacerbates all of the negative consequences of today’s entitlement system. The Congressional Budget Office estimates it will reduce full-time employment by 2.5 million workers. Its heavy reliance on federal regulation and control will strangle innovation in a sector of the economy that badly needs it and risks depressing the quality of American health care. And its expense, which can only remain hidden behind crude budget gimmicks for so long, will inevitably create pressure for massive tax hikes.

In its fundamentally centralizing, consolidating, managerial approach to the role of government, Obamacare embodies the liberal welfare state. By proposing a dynamic, decentralizing, consumer-driven, problem-solving approach to America’s health-financing dilemma in its place, conservatives have a chance to offer the public an alternative governing vision with implications for many other contested policy arenas. It is an opportunity to offer proof that a dynamic economy can be backed with a reliable safety net if we draw upon America’s proud tradition of constitutionalism and democratic-capitalism.

James C. Capretta is a fellow at the Ethics and Public Policy Center and a health policy consultant. Yuval Levin, also a fellow at EPPC, is the editor of National Affairs and a contributing editor to The Weekly Standard.

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