Republicans making same old mistake on health reform


by J.K. Wall

Source: Indianapolis Business Journal

When will Republicans ever learn?

They've spent four years spewing hatred at Obamacare and have little to show for it.

Meanwhile, they've failed to do the simple thing that even my 4-year-old knows he has to do when he wants to get me to change my mind: Offer a real alternative.

That's not because Republicans don't have any alternatives. In spite of the claims of Democrats and popular belief, there are several legitimate conservative proposals to reform the broken American health care system. I'll describe some of them shortly.

The problem is, Republicans and conservatives have hardly even tried to agree on a common plan for health reform.

The lack of a Republican plan has been the key reason why they have repeatedly failed to defeat or defund what remains a generally unpopular law-including the most recent effort that sparked the partial government shutdown and the crisis over raising the government's borrowing limit.

Americans may not like Obamacare, but they're sure they don't want to go back to the status quo. So, in the absence of a competing offer, they're sticking with Obamacare. At least that's how I read the polls.

This unsolicited advice to the GOP, which will go nowhere I'm sure, is offered in a friendly manner. Because I agree with several of the Republican criticisms of Obamacare. Most especially, that it spends a lot of money-about $200 billion a year-to treat symptoms of the dysfunctional U.S. health care system (the problem of the uninsured and underinsured) while doing only modest things to address the causes (industry-wide structures that make everything about health care unaffordable).

But Obamacare-whatever faults it may have-actually offers a treatment for the dysfunctional system. Republicans, as a whole, have steadfastly failed to offer one. At least in the past four years.

They did offer an alternative plan to the Clinton health plan back in 1994, which probably played a role in that plan's ultimate demise. They did usher in marginal reforms in 2003: tax-favored status for health savings accounts, as well as a prescription drug benefit and privatized option for Medicare recipients.

And both George W. Bush and John McCain, as presidential candidates, offered sweeping reforms that would have dramatically changed the health care market. But those plans never received broad acceptance by the rest of the party.

Instead, Republicans staged 40 impotent votes in the U.S. House to repeal part or all of the Patient Protection & Affordable Care Act and then launched the recent quixotic quest to defund it.

That's too bad. Because it's becoming apparent to many people-as stated recently by Eli Lilly and Co. CEO John Lechleiter-that there is a whole lot more post-Obamacare health reform to come. Yet Republicans again fail to give Americans a choice.

Why? Two reasons-one political and one ideological.

The political reason is that Republicans, as a whole, have been unwilling to tear up the existing health care system. I think that's in part because they have received so much support-financial and political-from the entities in that system. Health insurers, drug companies, medical device makers and physicians all have given handsomely to Republicans over the years. Conservative health economist John Goodman makes that point well here.

The ideological reason is that there are competing thoughts within conservatism about how to fix health care-and these competing schools of thought hardly talk to each other, let alone work to form a consensus. Again, Goodman provides a good summary of the situation. Some are focused on reforming the marketplace for third-party insurers. Others, like Goodman, are focused more on scaling back the roll of third-party insurance so they can create a true market among providers. Still others spend most of their time on Medicare, rather than the rest of the health care system.

Here's a quick and by no means exhaustive rundown of some of the conservative/Republican ideas for health reform:

Goodman wants to eliminate the tax break on health insurance premiums for employers and instead give refundable tax credits to all individuals who buy insurance. He tentatively proposed $2,500 per adult and $8,000 for a family of four.

Goodman's plan was the basis of a bill proposed by Republican legislators, known as the Coburn bill, which became the basis of the McCain plan. This bill is still around.

The American Enterprise Institute unveiled a proposal in August called "Best of Both Worlds."; It would try to create univeral insurance coverage by eliminating the employer tax break in favor of individual tax credits and create insurance policies that run for multiple years, in order to encourage behavior and care that improve health.

Ramesh Ponnuru and Yuval Levin, in a proposal published in April, would extend the employer tax break on health insurance to all individuals as well as allow insurance to be sold across state lines, and create high-risk pools to help manage the transition for the sickest Americans.

Another idea is, somewhat counterintuitively, to use Obamacare's architecture to enact a free-market reform of health care, based on Switzerland's health insurance system. That was proposed by conservatives Avik Roy and Douglas Holtz-Eakin here.

"For far too long, conservatives have failed to coalesce around a long-term vision of what a free-market healthcare system should look like," Roy and Holtz-Eakin wrote in a Reuters article. "Republican attention to healthcare, in turn, has only arisen sporadically, in response to Democratic initiatives. Obamacare is the logical byproduct of this conservative policy neglect."

Obamacare, whether you like it or hate it, won't be the last attempt to fix health care. Democrats certainly didn't get everything they wanted in the bill, and they'll push for further reforms. Republicans should, at long last, accept that they lost the most recent health care battle, but be ready with well-developed policies to win the next one.

That's how our government-when it's working-works.