Reforming the Reform

OP-ED COLUMNIST

By ROSS DOUTHAT

Published: January 23, 2011

Last week, the Republican Party proved that it has the votes to repeal health care reform — but only in the House of Representatives. (Unfortunately for conservatives, the Senate and the White House also have a say in the matter.) The House vote on Wednesday may be remembered as a first step toward actual repeal, or as a futile exercise in fist-shaking. It all depends on whether Republicans can find a strategy for undoing the health care legislation that doesn’t involve an immediate frontal assault.

One option is for Congressional Republicans to hold hearings, stage more symbolic votes, and hope that the 2012 election delivers them a Senate majority, a new occupant in the White House and a chance at full repeal. But of course there’s no guarantee that Obama will be defeated — and even if he is, by 2013 health care reform may be more entrenched, and the Democratic Party more united than ever in its determination to defend it. (The filibuster, lately a Republican weapon, could become the means by which supporters of Obamacare ensure that it endures.)

Another option would be to attack the law piecemeal by going after its least popular provisions — the new taxes, the Medicare cuts and the fine for Americans who don’t buy insurance. This strategy might be good short-term politics but would do little to lay the groundwork for an actual conservative alternative. Worse, in the unlikely event that the piecemeal attacks succeeded, Obamacare would be transformed from a notionally deficit-neutral bill into a straightforward budget-buster. And heightening a program’s contradictions in the hopes that it falls apart is an approach better suited to Marxists than conservatives.

What Republicans need is a different kind of incremental approach, one that uses the strongest conservative critiques of the health care bill as a framework for a reform of the reform. If Obama is defeated in 2012, this framework could easily be adapted into a full scale repeal-and-replace effort. But in the event that he’s re-elected, it would offer a Republican Congress a blueprint for improving the law without doing away with it entirely.

Here are three such conservative critiques: first, that Obamacare entrenches the very model of health care financingthat drove costs sky-high to begin with — a model in which every insurance plan has to be comprehensive, every significant payment is made by a third party, and consumers have no idea what their treatments actually cost.

Second, the new subsidies for the uninsured are so expansive that they may encourage employers to stop offering insurance altogether, offloading their employees into the new health care exchanges and swiftly overwhelming the federal budget.

Third, the mandate to buy health insurance infringes on American liberties: never before has Washington required that private citizens purchase a particular product from a particular set of private companies.

To address the first problem, Republicans should work to deregulate the new health care exchanges, so that high-deductible, catastrophic coverage can be purchased as easily as comprehensive plans. To address the second, they should propose capping the subsidies for the uninsured, so that they don’t dramatically exceed the value of the existing tax subsidy for employer-provided insurance.

The mandate is a harder puzzle, since it works in tandem with the requirement — popular enough to have many Republican supporters — that insurers cease denying coverage to customers with pre-existing conditions. If you repealed the mandate without repealing that requirement, people could simply wait until they were sick to buy insurance, driving everyone’s prices up.

But Republicans could propose dealing with the same problem in a less coercive way. One alternative would establish limited enrollment periods (every two years, for instance) when people with pre-existing conditions could buy into the new exchanges without being denied coverage. Anyone who failed to take advantage wouldn’t be able to get coverage for a pre-existing condition until the next enrollment period arrived. This would reduce the incentive to game the system, without directly penalizing Americans who decline to buy insurance.

None of these changes would be as sweeping and satisfying as repealing the health care bill outright. And many conservatives are loath to send President Obama anything that he might actually sign, lest he use the cover of bipartisanship to evade responsibility for health care reform’s unpopularity.

But in the unlikely event that the president did embrace a reform of the reform, conservatives would have an opportunity to transform Obamacare from within. With the right changes, the new health care law could expand access to insurance in a more cost-effective, less coercive and more market-oriented way. Which is to say, it could become the kind of reform that conservatives claim to have been looking for all along.