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January 27 2014

Life After ObamaCare: Not Too Soon To Think About Tomorrow

Charlotte Hays

It is not too soon to contemplate life after ObamaCare. Don’t get me wrong: the people who brought us this monstrosity will fight to protect it or to replace it with something worse (a single-payer system).

But those of us who want an improved system rather than a system that satisfies a progressive ideological itch must be ready. To that end, three senior Republican senators, Tom Coburn of Oklahoma, Richard Burr of North Carolina and Orrin Hatch of Utah, have put forward a plan. The plan starts with repeal of ObamaCare.

Jeffrey Anderson, executive director of the 2017 Project, which seeks to develop and advance a conservative reform agenda, has written a memo to “interested Parties” on the senators’ plan. It is available on the organization’s website and at the Weekly Standard. According to Anderson, the Republican senators’ plan “beats ObamaCare in every particular.”

Anderson hits the high points of the proposal:

It wisely offers a tax credit to help end the tax code’s unfair treatment of health insurance purchased in the individual market. Like an upcoming alternative that will soon be released by the 2017 Project, it also makes those tax credits age-based. This is a feature that has previously been lacking in GOP proposals, but it’s an important one. Obamacare artificially hikes the cost of health care for the young, but in the real world—the world in which Obama, Kathleen Sebelius, and congressional Democrats don’t get to set the prices—actuarial tables suggest that those in their 20s should be able to get health insurance for roughly a sixth the price of those in their 60s. To avoid their being unduly skimpy or excessively costly, tax credits should reflect that reality.

The senators’ proposal nicely blends considerations of policy and those of simplicity on this point, having three levels of tax credits: $1,560 for those under 35 ($3,400 for a family), $2,530 for those between 35 and 50 ($6,610 for a family), and $3,720 for those who are 50 or over ($8,810 for a family).

Their proposal is also quite strong in how it deals with the sticky problem of preexisting conditions. Following the general framework advocated by James Capretta, Tom Miller, and others, it would enable those who have remained continually insured (those who have remained insured for something on the order of 18 months without a significant break in coverage) to move seamlessly from the employer-based market to the individual market—without being subject to the underwriting process and the higher prices (or outright rejections) for preexisting conditions that can result. It would also provide meaningful federal funding for state-run “high risk” pools, through which anyone could get partially subsidized coverage and couldn’t be turned away on the basis of a preexisting condition.

The proposal is also well-conceived in what it wisely doesn’t contain. It doesn’t end, or replace, the tax break for employer-sponsored insurance (although, importantly, it does stop that tax break from being an open-ended invitation to spend ever-more money on health care, tax-free). And it doesn’t deal with Medicare reform. (An Obamacare alternative isn’t the place for that.)

Anderson expects ObamaCare supporters to argue that the senators’ plan won’t end up with as many people being insured as are insured under ObamaCare. Anderson points out that the Congressional Budget Office projects that 31 million people will remain uninsured under ObamaCare.

Remember the CBO’s number when Obama brazenly, but predictably, claims again tomorrow that Obamacare provides “universal coverage.”

Because of the coercive nature of ObamaCare, it may be correct to say that more people will end up insured. But Anderson says that it is also safe to expect that under the Republican senators’ plan more people would freely opt to be insured.

The proposal is, according to Anderson, not without faults, including auto-enrollment by states (with the option to opt out), and a tax credits system which is too close to the Affordable Care Act’s. But an alternative to ObamaCare is on the table and ready to be debated. If ObamaCare is repealed—or should I say when?—there will be no lack of alternatives.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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