Don’t Just Replace Obamacare—Replace the Great Society
7:45 AM, Sep 4, 2014 • By AVIK ROY
Given that I’ve probably published more articles critical of Obamacare than anyone alive, I’m often asked to speak to conservative audiences about our new health law. Last month, I was at the big grassroots confab of Americans for Prosperity, the Defending the American Dream Summit. I asked the packed house, “How many of you are on Medicare?” More than half the audience raised their hands. “Guess what?” I responded. “You’re all on single-payer health care.”
The stunned looks on their faces reinforced one of the most important aspects of our present health care debate. While conservatives fret about the possibility that Obamacare may be a Trojan horse for single-payer government-run health care, we usually forget that more than 90 million Americans are already on single-payer health care: those who get coverage from Medicare, Medicaid, and the Veterans Health Administration.
And you don’t need to be a fan of dark conspiracy theories to believe that “Affordable Care Act” expands single-payer health care in America. It’s right there in Title II of the law, under which Obamacare substantially expands Medicaid.
Many conservatives believe that we had a free-market health care system in America, until Obamacare was signed into law. But that’s not true. The government takeover of our health care system didn’t happen in 2010. It happened in 1965, when LBJ shepherded through Congress the amendments to the Social Security Act that became known as Medicare and Medicaid.
If Obamacare had never been passed, we’d still be spending tens of trillions of dollars we don’t have on single-payer health care entitlements. In 2022, federal spending on our older health care entitlements will exceed $1.5 trillion. Obamacare will increase that total by about 16 percent. Indeed, in 2010, before Obamacare was enacted, U.S. per-capita government spending on health care was higher than all but three other countries in the entire world: $3,967 for every man, woman, and child in the country. That’s higher than Germany ($3,331), Canada ($3,158), France ($3,061) and Great Britain ($2,857).
Among wealthy nations, two of the best performers on per-capital public health care spending are Switzerland ($1,628 per person in 2010) and Singapore (just $813). It’s no accident that according to the Heritage Foundation’s 2014 Index of Economic Freedom, Switzerland ranked fourth-freest and Singapore ranked second. (The U.S. was a distant 12th.)
Why do Switzerland and Singapore do so well? Because they harness market forces to offer high-quality coverage at a low price. There are no government-run insurers in Switzerland; about two-fifths of the population qualifies for means-tested premium subsidies, while everyone else purchases unsubsidized private insurance. Singapore has a universal system of consumer-driven health savings accounts and high-deductible insurance. Neither are libertarian utopias, but both are considerably freer than the government-fueled disaster in the United States.
I draw from the lessons of Switzerland and Singapore in my new white paper published by the Manhattan Institute, Transcending Obamacare: A Patient-Centered Plan for Near-Universal Coverage and Permanent Fiscal Solvency. The plan would replace the entire suite of government-run health care programs: not just Obamacare, but also Medicare, Medicaid, and the VA. Over thirty years, we estimate that it would reduce federal spending by $10.5 trillion, make the Medicare Trust Fund permanently solvent, and reduce the cost of single health insurance policies by 17 percent.
It would repeal nearly all of Obamacare’s tax hikes, its constitutionally injurious individual mandate, and a large swath of Obamacare’s federal insurance regulations. Over time, it would fully replace single-payer health care in the U.S. with what conservatives have long favored: tax credits for the purchase of high-deductible health insurance and health savings accounts. In other words, it would take the number of Americans on single-payer health care from over 100 million in 2017 to nearly zero.
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