Amid calls on the political Right to repeal Obamacare, Ramesh Ponnuru‘s latest column at National Review Online asks conservatives to focus on the issue of ensuring access to health insurance.
Just how important is it that everybody in the United States be able to get health insurance? Conservatives are ambivalent, at best, about that goal. Many of them think that it is more important to restrain the growth of health-care costs; many of them worry that putting insurance within reach for everyone would involve excessive government power. They are right to be concerned about costs and about big government. They should nevertheless overcome their ambivalence. There are good reasons to embrace a conservative health-care policy that enables coverage for all Americans who seek it — not the least being that in the present political context, that policy might be the best way to restrain both costs and government. …
… Being protected against the risk of catastrophic health expenses is a valuable good — but it’s one that government policies in the United States have done a lot to keep people from getting. The federal tax code has since World War II encouraged people to get health-insurance policies through their employers, and encouraged expensive employer policies over cheap ones. That policy has both raised costs and stunted the growth of the market for individually purchased insurance. State governments have further weakened that market with regulations. They require insurance policies to cover certain services — hair transplants in one state, in vitro fertilization in another — which raises costs and hinders the development of national risk pools.
These government policies (and other ones) have made insurance, and health care generally, more expensive for people who don’t have employer coverage. By preventing the emergence of a robust market in cheap, renewable catastrophic insurance for individuals, they have created serious problems for some people when they get sick. They often find it difficult to get insurance if they do not have employer coverage or need to change employers.
Almost nobody is calling for an end to all federal tax breaks for health insurance or to state regulation of it, and anyone who did call for those things would get nowhere. But it is possible to modify government policies so that they do less to suppress the emergence of a market in cheap, renewable individual insurance policies.
A number of health-care plans proposed by conservatives would do just that. The Burr-Hatch-Upton legislation, the reform advanced by a group called the 2017 Project, and a new bill from House Budget Committee chairman Tom Price would repeal Obamacare, curtail the tax break for employer-provided coverage, and provide a tax credit to people who buy insurance on the individual market. The credits would be set at a level to enable people to purchase policies that cover at least catastrophic expenses, and more depending on how much they wish to supplement the credit from their own pockets. These proposals would also enable people to buy individual policies from out of state, thus bypassing the most onerous regulations in their own states.
