Republicans' Last Chance to Dump Obamacare
When it comes to health-care policy, Republicans are known more by what they oppose than by what they support. Americans are familiar with their fierce resistance to policies proposed by the Bill Clinton administration in 1993 and 1994, and their continuing battle against Obamacare. Outside the small Washington policy community, however, few Americans know what Republicans would do to fix the nation’s health-care system. That must change in 2015 -- or it may never change at all.
Republicans already have a broad consensus on what they want: to give consumers greater control over health-care spending and, as a result, the incentive to seek the most effective bang for their medical buck. A freer, more responsive market would, over time, improve consumer choice, increase quality and reduce costs -- just as it does in other sectors.
Trouble is, the party's broad consensus breaks down over precisely how much government intervention is necessary to realize those goals. The philosophical differences lead to policy conflicts.
For instance, many Republicans support allowing individuals to buy health insurance with pretax dollars, whether they purchase it on their own or through their employers. Creating a standard tax deduction for this wouldn’t require new spending, but it would have limited value to low-income consumers who have little or no income-tax liability. That’s why other Republicans support providing age- or income-based refundable tax credits, which would provide a set amount of money for purchasing health insurance -- even to those who don’t owe taxes. Such credits would better expand coverage, but they would also cost more.
The evolution of Obamacare has added new political and policy variables to the Republican calculus. Is full repeal of the Affordable Care Act a realistic option given that the law now has millions of beneficiaries? Would an alternative have to account for those whose coverage would be displaced if Obamacare were significantly altered? Should Republicans roll back tax-and-spending levels to what they would have been without Obamacare? Or should they merely aim to spend less than the current law?
Some Republicans might prefer to duck these questions. But that's no longer a viable option. Baby boomers are retiring, and Medicare is growing rapidly. Meanwhile, Obamacare has expanded the Medicaid rolls and enabled Americans to gain newly subsidized insurance through public exchanges. All told, the Congressional Budget Office projects that the federal government's major health programs will cost about $13.8 trillion over a decade, ensuring that health care will be the primary driver of national debt.
Republicans have good political, as well as policy, reasons to get serious about a strategy. Almost five years after Obamacare was signed into law, Republicans now control both chambers of Congress. They can no longer argue that any Republican proposal would languish in the Democratic Senate.
Meanwhile, a large and ideologically diverse field of Republican presidential candidates will soon be crisscrossing the country, making their cases to primary voters in speeches, policy forums and debates. The coming campaign provides an excellent opportunity for the party to hash out policy differences and rally around consensus positions.
Adding urgency is King v. Burwell, the legal case challenging the validity of the subsidies being distributed through Obamacare's federal insurance exchange. The U.S. Supreme Court is expected to decide by late June whether millions of Americans in three dozen states are benefiting from illegal health insurance subsidies. If the justices invalidate those subsidies, Republicans must have a free-market alternative waiting in the wings. Otherwise, there will be tremendous pressure on Congress to pass a “fix” allowing existing benefits to continue. Obamacare will be entrenched before Republicans even get a chance to retake the White House. The time to stop that is now.
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