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Don’t Just Replace Obamacare—Replace the Great Society

7:45 AM, Sep 4, 2014 • By AVIK ROY
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Because the plan deregulates the delivery of health insurance, it makes coverage far more affordable; we estimate that 12 million more Americans would have health insurance under the plan than under Obamacare, despite the fact that the plan substantially reduces federal and state health spending.

Importantly, the plan doesn’t impose a drastic disruption on those who have gained coverage through Obamacare. Instead, it gradually migrates the Obamacare population into a new, fully privatized, tax credit-based system. Much like the replace plan proposed by senators Tom Coburn, Richard Burr, and Orrin Hatch, our plan would reduce the number of people eligible for subsidized coverage. And it would allow eligible individuals to use those tax credits to buy plans of their own choosing, instead of ones that the federal government has forced them to buy. One could repeal Obamacare and replace it with this system, or simply repeal the bulk of Obamacare—its mandates, regulations, tax hikes, and single-payer expansions—while deregulating and replacing the rest.

Jeff Anderson, writing here on the Weekly Standard blog, finds this approach intolerable, claiming that it is an attempt to “refine and enlarge Obamacare.” But how is a plan that repeals everything offensive about the ACA, and reduces federal spending by $10.5 trillion, an “enlargement” of Obamacare?

Anderson has proposed his own plan through the 2017 Project. It has many commendable aspects to it. Its core plank—to repeal Obamacare and replace it with a system of universally available tax credits for the purchase of private coverage—is strikingly reminiscent of the repeal-and-replace plan offered by Mitt Romney in the 2012 campaign.

But there’s one big difference between Romney’s 2012 platform and Anderson’s 2017 plan. Romney was the first—and still the only—major-party nominee for president to propose a plan for reducing the trajectory of Medicare spending. Not only did Romney campaign on Medicare reform, he doubled down on his plan, by picking as his vice presidential nominee Paul Ryan, the man most closely identified with Medicare reform today.

Anderson’s 2017 Project plan, by contrast, explicitly eschews Medicare reform. “A winning alternative [to Obamacare]…shouldn’t veer into important but nevertheless tangential issues like Medicare reform,” Anderson writes. Anderson thus protects the single-payer Medicare behemoth that is bankrupting America from reform, while simultaneously calling Obamacare “perhaps the worst piece of legislation in American history.”

I would agree that Obamacare is the worst new law in a generation. But it’s not worse than Medicare and Medicaid, which remain on the books today, and have imposed more than $100 trillion in unfunded liabilities on our grandchildren. And there are certainly stronger candidates for worst law in American history: The Sixteenth Amendment? Prohibition? The Alien and Sedition Acts? Jim Crow? The Three-Fifths Compromise? The Fugitive Slave Act?

As a political strategy in a Republican primary, Anderson’s plan is a plausible one. Protecting Medicare is popular with the older conservative base. But Anderson ought not dismiss the largest single-payer health care program in America as “tangential.” Medicare has done far more to distort the U.S. health care system than any other program in history, and its reform must be at the top of any serious agenda to tackle the fiscal crisis we all face.

According to the Congressional Budget Office’s Long Term Budget Outlook, nearly every dollar in the growth of federal spending as a share of GDP is driven by our health care entitlements: Medicare, Medicaid, and now Obamacare. We must reform them all, before it’s too late. If conservatives keep their sights set solely on Obamacare, then the left has already won.

Avik Roy is a senior fellow at the Manhattan Institute for Policy Research. In 2012, he served as a health care policy adviser to Mitt Romney.

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