Though the Affordable Care Act passed into
law in 2010, conservatives continue to fight it at every
opportunity: in the courts, in state legislatures, and in
Congress. It’s a safe bet that as the race for the 2016 GOP
presidential nomination kicks off, a cavalcade of Republican
hopefuls will torment innocent Iowans with tales of how they’ve
fought Obamacare in the past and why they’re the ones who can
finally drive a stake through its heart. But if you don’t read
the conservative press, you might have no idea why those of us
on the right side of the political spectrum are so worked up
about Obamacare. To promote cross-ideological understanding,
I’ve prepared this little FAQ.
Why do conservatives oppose Obamacare?
Not all conservatives are alike, and there are at least some,
like Avik Roy of the Manhattan Institute, who believe Obamacare
should be reformed and not repealed. But as a general rule,
conservatives oppose the law and would like to see it repealed
for several reasons.
First, some conservatives oppose it for the same reason that
liberals favor it: Through the Medicaid expansion and the
exchanges, it subsidizes insurance coverage for people of modest
means by raising taxes on people of less-modest means and (in
theory) by curbing the growth in Medicare spending.
Conservatives tend not to be enthusiastic about redistribution,
and they’re particularly skeptical about redistribution that
isn’t transparent.
Second, there is a widespread belief on the right that the main
driver of the federal government’s fiscal woes is the soaring
cost of health entitlements, like Medicare and Medicaid.
Champions of Obamacare claim that the law will improve matters
by encouraging innovative approaches to paying providers, which
will yield big efficiency gains. Conservatives are skeptical.
They believe that instead of driving efficiency gains,
Obamacare’s highly prescriptive approach to insurance will
stymie cost-saving innovation and that its costs will soar as it
expands. Instead of tackling the health entitlement problem, say
conservatives, Obamacare will make matters worse.
Third, most conservatives believe that America needs a system of
market-based health reform that will be cheaper, less coercive,
and less prescriptive than Obamacare, and they’re convinced that
the only way to get from here to there is to repeal Obamacare
root and branch. The problem, as we’ll see, is that there’s not
a lot of consensus around what an Obamacare replacement should
look like.
There are, of course, other reasons conservatives oppose
Obamacare, but these are a good starting point.
OK, got it—conservatives oppose a new spending program because
they’re conservatives. But why are conservatives so pissed off
about Obamacare?
Many on the right believe the White House sold Obamacare
dishonestly. Back in 2009, when conservatives and liberals were
duking it out over President Obama’s push for a new federal
health care law, the president often insisted that if you like
your insurance plan, you’d be able to keep it. Predictably
enough, many conservatives claimed that if the president’s
overhaul of the U.S. health system passed, many people would
lose insurance plans they like. It turns out that, as the Wall
Street Journal reported last fall, White House officials debated
the president’s pledge because at least some of them feared that
it was misleading. Eventually, the dissenters came around.
“Officials worried,” according to the Journal, “that delving
into such details as the small number of people who might lose
insurance could be confusing and would clutter the president’s
message.” Well, you wouldn’t want to clutter the message, now
would you?
Then there is the matter of how the Congressional Budget Office
estimated how much Obamacare would eventually cost—an issue that
recently resurfaced when off-the-cuff remarks from MIT health
economist Jonathan Gruber went viral. Gruber is considered one
of the chief architects of Obamacare, having played a large role
in the Massachusetts universal coverage plan that served as its
inspiration and as a consultant to the Obama administration
during the early stages of the health reform effort. His
enthusiasm for Obamacare borders on the absurd—he even wrote a
graphic novel touting its virtues. But his loose lips have
caused headaches for the White House, and it’s no wonder he’s
being disowned by many of his erstwhile friends.
Last fall, Gruber told a smallish audience at an academic panel
that the Obamacare legislation was carefully written to ensure
that the CBO “did not score the mandate as taxes.” This is a
bigger deal than you might think, as one of the key reasons Bill
Clinton’s 1993 health reform effort failed is that it featured
an astronomically high tax bill. The Obama White House had a few
advantages that the Clinton White House did not. The most
important one is that it was able to learn from Clintoncare’s
defeat. Another is that President Obama’s first budget director,
Peter Orszag, had just served as the head of the CBO, and so he
had an excellent understanding of how the CBO would score health
reform legislation. With this in mind, Michael F. Cannon of the
Cato Institute, an indefatigable libertarian foe of Obamacare,
observed back in 2009 that the Democrats’ “tailoring their
private-sector mandates to avoid having those costs appear in
the federal budget” made Obamacare look much less expensive than
it really was.
When liberals say that conservatives should just accept that
Obamacare is the law of the land and move on, they fail to
understand that conservatives believe that Obamacare only became
the law of the land because President Obama misled the public.
Wait a second. Isn’t Obamacare actually a Republican plan?
While Democrats were pushing for Obamacare, Rep. Paul Ryan, the
Republican from Wisconsin, was pushing for an ambitious Medicare
reform that bore a strong family resemblance to Obamacare. Both
Ryan’s Medicare reform and Obamacare envisioned giving
beneficiaries a subsidy that they could use to purchase
insurance coverage on a regulated marketplace or exchange, with
an eye toward harnessing the power of competition to hold down
costs. So why did Ryan oppose Obamacare if he was so
enthusiastic about this approach in Medicare? Was it because
he—along with all other anti-Obamacare Republicans—is a
hypocrite?
Well, no. In Medicare, Ryan hoped to move a single-payer health
entitlement in a more market-oriented direction. To put it
crudely, the goal of Ryan’s Medicare reform was to move from
more socialism to less socialism. For better or for worse, there
is now a consensus that the federal government should finance a
large chunk of medical expenditures for all older Americans, and
that’s been true for decades. There is no such consensus for
non-elderly adults, which is why Obamacare, which sought to move
us in the direction of establishing a universal health
entitlement, was so hotly contested. The problem with Obamacare,
for Ryan and others on the right, is that it moved America’s
health system in the wrong direction, from less socialism to
more socialism.
Yuval Levin, the editor of the conservative policy journal
National Affairs, has said that the debate over health reform is
about “which way, not how far.” That is, while wonks on both
sides agree that the pre-Obamacare health system was royally
screwed-up, they disagreed about how to fix it. Liberals wanted
to make the system more centralized and orderly—sure, there can
be competition, but only insurance plans that meet strictly
defined standards set by credentialed professionals can compete.
Conservatives wanted to make the system more of a free market,
in which government subsidies to help people buy coverage are
visible and, ideally, capped. By capping subsidies, consumers
would have a strong incentive to shop wisely, and insurers and
providers would be pressured into coming up with new ways to
offer more value for the money. Another way of putting this:
While liberals think health care is too important to leave to
the messy, trial-and-error process of the free market,
conservatives think a trial-and-error discovery process is the
only way the health system can get better, cheaper, and smarter
over time.
There is nothing wrong in principle with establishing
marketplaces where people can buy insurance. There are
conservative plans that feature marketplaces too! Yet the
Obamacare exchanges do much more than just provide a place where
people can compare different plans. They shift responsibility
for regulating the individual insurance market from state
governments to the federal government, even in the case of the
partner exchanges established by states in accordance with
federal rules. The Obamacare exchanges aren’t best understood as
simple marketplaces, where the main role of regulators is to
ensure transparency. Rather, they serve as central planning
boards that establish coverage mandates and review rates. You
might think that’s a good thing or a bad thing, but it
definitely limits opportunities to offer new types of coverage
and new models for care delivery.
Of course, the exchanges are only part of how Obamacare expands
insurance coverage. Just as important is its mammoth expansion
of Medicaid, a program that conservatives have long criticized
for delivering poor health outcomes and for its joint
state-federal structure, which encourages overspending.
When you look at Obamacare as a law that greatly increases
federal regulation of the insurance market and federal spending
while doubling down on Medicaid, it should be clear that it is
not ideal from a conservative perspective.
But what about the individual mandate? Wasn’t it dreamed up by
the right-wing Heritage Foundation?
The individual mandate has a long, tortured history that Avik
Roy has described in detail. Conservative wonks did devise the
individual mandate as an alternative to an employer mandate, an
idea that had been gaining traction for years. Many on the right
feared that if employers were forced to pick up the tab for
health insurance, we would see less hiring, and an individual
mandate was seen as less economically harmful.
It is important to understand, however, that the pre-Obamacare
conversation about the individual mandate never really reached
the conservative grass roots, where infringing liberty is
generally seen as a no-no. Just as we can’t expect that Arizona
Sen. John McCain’s support for cap and trade meant that Joseph
J. McCoalburner also favored hiking oil prices to save the polar
bears, it’s not exactly a shock that the Republican masses
didn’t greet the idea of an individual mandate with wild
enthusiasm.
Moreover, conservatives have other ideas for addressing the
problem that the individual mandate is meant to solve: that if
you guarantee that people with pre-existing conditions will be
covered, some will only buy coverage when they get sick. One
idea is to provide protections for those who’ve been
continuously insured, which would create a strong incentive to
get covered early and to stay that way. More controversially,
James Capretta has called for low-cost default insurance, in
which state governments would automatically sign you up for
cheap coverage, but you could opt out at any time. Though many
conservatives balk at this kind of soft paternalism, it would
almost certainly mean higher coverage levels than a weak
individual mandate.
Do Republicans have any ideas for replacing Obamacare, or do
they intend to repeal it and just leave everyone who needs
health insurance in a lurch?
There are a number of reform proposals that have been floating
around over the past few years, and I expect we’ll see more of
them. Yuval Levin and Ramesh Ponnuru have proposed overhauling
the way the tax code treats health insurance. One of the
craziest things about our current system is that people with
high incomes get a bigger tax subsidy from the federal
government when they get health insurance through their
employers than people with lower incomes do. Obamacare is
scheduled to introduce the so-called Cadillac tax in 2018 to
discourage employers from offering high-cost plans, but this is
an indirect way of addressing the fundamental unfairness of the
current system. Levin and Ponnuru, along with many others on the
right, argue that this tax exclusion for employer-sponsored
health insurance should be capped and that people who don’t get
their health insurance through their employers should get a
refundable tax credit to help them pay for coverage. Medicaid
would, eventually, become an add-on payment on top of this tax
credit to give poor people more help. James Capretta has gone
into greater detail on how Medicaid might be transformed to make
it more cost-effective.
The problem with this strategy, from a conservative perspective,
is that it is pretty expensive. Refundable tax credits don’t
grow on trees. So when three Republican senators teamed up to
release their own health reform plan, broadly similar to the
ideas advanced by Levin, Ponnuru, and Capretta, they limited the
credit to households earning 300 percent of the federal poverty
level or less, a cap that would leave out a decent number of
middle-income families.
Other conservatives, like Bobby Jindal, the profoundly unpopular
Republican governor of Louisiana, have proposed even stingier
plans, which will have a tough time passing muster in the
post-Obamacare era. This is part of why the aforementioned Avik
Roy has argued that conservatives should just accept that
Obamacare is here to stay and that they should jiu-jitsu it into
the market-oriented reform of their dreams.
I’m a firm believer in scrapping Obamacare and starting over.
But that’s much easier said than done. |