Do Republicans Have an Alternative to Obamacare?

With the Supreme Court likely to rule on the Affordable Care Act tomorrow, I’ve been thinking quite a bit about what will happen afterwards.

 

Most insiders now say that it’s likely that the Supreme Court will strike down the individual mandate, if not the entire law.  Republicans have been saying for years that they want to “repeal and replace” the law.  If the Supreme Court strikes down the law, then it has accomplished the first part of that mantra.  But what to replace it with?  And how?

As an aside, I read an article in the New Yorker magazine by Ezra Klein, in which he complained that Republicans oppose the individual mandate in the ObamaCare law, saying, “It had, after all, been at the heart of Republican health-care reforms for two decades.”  He also concluded,

“It was not an isolated case. In 2007, both Newt Gingrich and John McCain wanted a cap-and-trade program in order to reduce carbon emissions. Today, neither they nor any other leading Republicans support cap-and-trade. In 2008, the Bush Administration proposed, pushed, and signed the Economic Stimulus Act, a deficit-financed tax cut designed to boost the flagging economy. Today, few Republicans admit that a deficit-financed stimulus can work. Indeed, with the exception of raising taxes on the rich, virtually every major policy currently associated with the Obama Administration was, within the past decade, a Republican idea in good standing.”

This made me chuckle for two reasons: first, it makes it appear that the Democrats have no thinkers among them, so they have to look for discarded Republican ideas to pick up and champion; and second, it makes the Republicans look as though they have the ability to drop a bad idea when facts turn out not to support it, while Democrats cling to those bad ideas, determined to go down in a blaze of glory to preserve them.

But that’s just partisan sniping… what are the “replacements” that Republicans support?  There are really two camps of Republicans…

Keep the Popular Parts

There are those in the Republican party that just want the problem of health care to go away.  They want to kick the problems down the road for someone else to deal with.  So, while they know that the Democrats’ solution won’t work, they don’t necessarily want to deal with the headache which would come from offering a true Republican alternative.  However, they’re willing to scale back the Democrats’ reform bill, keeping the popular parts, and throwing out the unpopular parts.  One might call this group of people the “ObamaCare Lite” group.  They would keep the provision that allows a child to stay on their parents’ insurance plan until age 26.  They would keep the provision that says that an insurance company can’t turn someone away for pre-existing conditions.  They would keep the parts that test well in polling.

The problem with this thinking, according to some, is that while these are the mostpopularprovisions, they are not necessarily thebestprovisions, or the best solutions.

The Free Market Alternative

The second alternative comes from the conservatives in the Republican party, so this view might also be considered the “conservative alternative.”  Conservatives view health care through the lens of limited government, so they ask the question, “How can government create an environment in which the market can control costs?” instead of asking the question, “How can government control costs?”

Most of these alternatives (and there are several) have a few common components:

  • Allow individuals to shop for health insurance across state lines – it’s a little baffling to me why most other products that are sold in the U.S. are subject to competition, but with insurance, you can only buy from a select few providers that sell in your state.
  • Medical malpractice reform – there are those that say that medical malpracice reform would have a negligible effect on the cost of health care, but pushing malpractice reform is probably a good thing to do anyway, because it lowers the cost for doctors of doing business (not to mention it puts less money in the hands of trial lawyers, a loyal Democratic special interest group).
  • Individual deductibility of health insurance premiums – for-profit companies get a tax break for giving their employees health insurance, so if an individual buys their own insurance, then they should also get a tax break.

John C. Goodman, the president and founder of the National Center for Policy Analysis, offered an answer to the question in April 2012, saying that the alternative was John McCain’s health reform, which was based upon a bill sponsored by Sens. Tom Coburn (R-OK) and Richard Burr (R-NC), along with Reps. Paul Ryan (R-WI) and Devin Nunes (R-CA).  The bill, in turn, was based upon an idea which Mark Pauly proposed along with Goodman in a Health Affairs article more than a decade ago, about six years after Republicans supposedly all supported the idea of an individual mandate, and about fourteen years before no Republican any longer supported that idea.

Here’s the gist of the Goodman/Ryan/Burr/Coburn/McCain alternative:

  • The current system of tax and spending subsidies would be replaced by a tax credit of, say, $2,500 per person or $8,000 for a family of four for the purchase of health insurance.
  • The subsidy would be refundable; everyone gets it even if he does not owe any income taxes.
  • Families could obtain the subsidy in the year in which the insurance is purchased and would not have to wait until April 15 of the following year to get their credit.
  • Insurance companies and other intermediaries would be able to help families obtain their credit and apply it directly to health insurance premiums.

“As a result, people who must purchase their own insurance (including part-time workers and the self-employed) would get just as much tax relief as people who obtain insurance through an employer.

“The tax credit would subsidize the core insurance that everyone should have.  It would not subsidize all the bells and whistles, as the current system does.”

Conclusion

As with many other things that I’ve considered on this blog, the differences in health care reform between the Republican party and the Democratic party can be described in terms of increasing government control over industry (the Democrats’ approach), and limiting government control over industry (the Republicans’ approach).  Many Democrats would like the government to take over the healthcare insurance industry and install a single-payer system (because “good enough for government work” is a phrase that has no basis in fact), while Republicans would like to have the government exert very little control over the healthcare industry, but instead rely on market pressures, competition, and private sector innovation to keep costs low and provide “universal” health care coverage.

Discussion Question: What is your alternative to the Affordable Care Act?

  • http://brocmiddleton.blogspot.com/ Broc Middleton

    It looks like IF Republicans have any legimate ideas to replace “Obamacare” they aren’t going to be in any hurry to implement them. (See link) http://www.politico.com/news/stories/0612/77870.html

    “…So at this point, Republicans aren’t exactly feeling any urgency to do anything proactive if the Supreme Court knocks down any or all of the law…
     

    “…Republicans also just don’t see much upside in relitigating health care in the summer before a presidential election once the Supreme Court has spoken…”

     
    “…The Republican strategy also shows that there’s little chance any new health care legislation would be considered on the floor of the House before the November election…”

    • http://bobewoldt.com Robert Ewoldt

      Attention, Red Herring: The Democrats are in no hurry to “relitigate” the issue before the November election, either.

      By the way, here’s another quote from the same article: “They’re going to let legislation slowly wind its way through committees and get debated, dissected and amended.” That’s the way the legislative process is supposed to work. It’s supposed to be a deliberation. We already know how it works out when a bill of this magnitude is rushed through the Congress without much deliberation, debate, etc.

      • http://brocmiddleton.blogspot.com/ Broc Middleton

        “The reasoning behind the go-slow approach is to show a contrast with Democrats, WHOM THEY ACCUSED of writing a 2,000-page bill in Democratic leaders’ offices and jamming it through Congress”

        • http://bobewoldt.com Robert Ewoldt

          Yes, exactly.

          • http://brocmiddleton.blogspot.com/ Broc Middleton

            Good, so you agree that its political gamesmanship that is behind Republican’s slow-go approach. Despite the American people needing a sense of urgency to keep protections in place that are of great benefit to the American people.

          • http://bobewoldt.com Robert Ewoldt

            No, that quote has nothing to do with political gamesmanship.  The Republicans (and the American people, I would argue) think that Democrats slapped together a poorly-written, poorly-conceived bill and forced it through Congress.  The Republicans will take a better approach to replacing the bill–with deliberation and thought–instead of (again) pushing a slip-shod bill through the legislature.

          • http://brocmiddleton.blogspot.com/ Broc Middleton

            Time will tell, but Republicans have vowed that unless the SCOTUS comes back with a FULL repeal (which is unlikely) that they are still going to push for full repeal in congress.   This position is not about “slip-shod” legislation, its about not giving Obama an victory in healthcare reform. 

  • http://brocmiddleton.blogspot.com/ Broc Middleton

    OBAMACARE RULED CONSTITUTIONAL!!!!!