by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Republicans are making progress, albeit slowly, toward replacing Obamacare. Last year, three Republican senators — Tom Coburn, Richard Burr, and Orrin Hatch — outlined a serious plan to replace it with a set of health-care policies that are much more free-market and limited-government in orientation, and not just compared with Obamacare but compared with what we had before it. Senator Coburn is not, alas, in the new Congress, but the other two senators have offered a slightly revised version of the plan with Representative Fred Upton.
Conservatives who worry that Republicans will come up with “Obamacare Lite” and call it a replacement can rest easy about this plan. It has no individual mandate, no employer mandate, no federally supported exchanges, and no Independent Payment Advisory Board. Obamacare essentially outlaws what conservatives consider true health insurance (protection against the risk of financially devastating health expenses); this plan legalizes it, and allows it to compete on a more level playing field than even the pre-Obamacare system did. …
… The Republican plan reduces the total amount of health-care subsidies. More important, it reforms them so that they are less destructive. The old policies — again, even the pre-Obamacare ones — effectively locked some people out of the health-insurance market while distorting the behavior of those who were in it. The proposal takes the most practical approach to remedying this situation: People will get a tax break for health insurance whether they get it themselves or through their employers.
It also creates the opportunity to liberate many low-income people from Medicaid. States would be allowed to cash out most Medicaid funds and give them to the beneficiaries so that they could participate in the broader insurance market rather than being stuck in that subpar program.
A formal estimate has found that the Republican approach would enable slightly more people to get insurance than Obamacare would — and at lower cost. And it would do this with, of course, a great deal less coercion and while increasing people’s choices.