Obamacare is an affront to American principles. It amounts to an unprecedented consolidation of money and control in the hands of the federal bureaucracy. It forces private citizens to buy a product or service of the government’s choosing for the first time in history, and it bans millions of Americans who would otherwise choose to buy or keep other products or services from doing so. It costs trillions when we already owe trillions. A nation “conceived in liberty” is now operating under a health care law predicated on coercion.
Yet despite these high stakes, conservatives have given surprisingly little serious thought to how to repeal Obamacare. Some have put down unrealistic or unhelpful markers—no new spending or taxes above the pre-Obamacare baseline—as if the problem were merely that Obamacare costs a lot and taxes a lot. Some pretend that if they do nothing, President Obama’s signature legislation will somehow fade away. Others have made peace with Obamacare and assume that most of it is here to stay.
But we can roll back the greatest domestic threat to limited government and liberty that most of us have ever faced. It’s obvious, and has been at least since the defeat of Hillarycare in the mid-1990s, that staving off the left’s attempts to socialize American medicine will require conservative solutions and reforms. The near-absence of such offerings in the 15 years from 1994 to 2009 provided fertile ground for Obamacare and enabled it to take root. Now that Obamacare is the law of the land, it’s all the more obvious that the only way to repeal it is to advance a winning alternative.
Such an alternative should pass two tests: (1) Will it pave the way to full repeal? And (2) will it fix what the government had already broken through the tax code (with the disparate tax treatment of individual and employer-based insurance) even before Obamacare was passed? The second of these is important; the first is indispensable.
Any viable conservative or Republican alternative to Obamacare would cut costs. But it must also deal with the thorny issue—used to great rhetorical advantage by Obama—of uninsured people with expensive preexisting conditions. Obama-care solves the problem by in effect outlawing the core principle (dating back to the Renaissance) of insurance itself—the idea that you buy coverage before you are sick or injured (or before your car crashes or your house burns or your spouse dies) as protection against that unforeseen event. Almost every Obamacare alternative under discussion would end this heavy-handed redefinition of insurance and replace it with a combination of commonsense insurance regulations and state-run, federally funded high-risk pools. While the specifics vary, the regulations would generally guarantee continuous coverage, while the high-risk pools would offer subsidized insurance to those whose preexisting conditions would make insurance unaffordable at market prices.
Given the general consensus on how a replacement of Obamacare should deal with preexisting conditions, what differentiates the Obamacare alternatives most sharply is their treatment of the tax code. Since World War II, the federal government has had its thumb on the scale, strongly favoring employer-based insurance over individual-market insurance. Thus, millions of Americans who buy their own insurance do so without a tax break, while their neighbors with employer-based insurance enjoy a large tax break. As a result, the individual market has largely dried up. And for all of its 2,700 pages of federal largess, Obamacare didn’t fix this unfairness in the tax code. Rather than cutting anyone’s taxes, it gives a small subsection of the population large subsidies while presenting most Americans with the tab.
Senators Richard Burr and Orrin Hatch and House Energy and Commerce chairman Fred Upton have advanced the most visible Republican alternative on Capitol Hill. It would offer income-tested, age-based, refundable tax credits in the individual market to roughly the same people who get Obamacare subsidies. People could use the tax credits to help buy insurance of their choice, rather than the insurance Obamacare compels them to buy. At the same time, the proposal would cap the tax break in the employer-based market at $30,000 for a family plan and $12,000 for an individual plan. People eligible for tax credits but who “fail to make an affirmative choice”—that is, who don’t buy insurance—could be automatically enrolled in a plan. The alternative would repeal most but not all of Obamacare, keeping such things as its Medicare raid and its requirement that insurers cover 25-year-olds on their parents’ policies, while repealing Obamacare’s exchanges, exchange subsidies, taxes, and almost all of its mandates.