NCPA - National Center for Policy Analysis

Repealing Obamacare Will Take Some Convincing

April 22, 2015

Can Obamacare still be repealed? Well, that depends. If the politicians will legislate according to the people's preferences, Obamacare is a jump-ball. A successful alternative reform would have to convince supporters of Obamacare that the potential reward is higher than the risks, says NCPA senior fellow John R. Graham.

Here is what that would look like:

  • First, people recognize that Obamacare induces insurers to enroll healthy people and shun sick people, making health plans less popular than ever. An alternative reform that improved the incentives for health plans to seek out sick people would be achieved through superior risk adjustment, whereby plans which over enroll healthy people reimburse plans that over enroll sick people.
  • Second, both Obamacare beneficiaries and the general public recognize that the health insurance exchanges are frustrating experiences that cost a lot of money. Scrap them and let people buy health insurance from brokers and agents, either on line or in person. This will make the purchasing experience less painful and should benefit insurers.
  • Third, convince insurers that Obamacare is bad for the economy. Obamacare's taxes have harmful incentives, including reducing working hours.  An improved system of tax credits for buying health insurance, which would not phase out so steeply as incomes rise, would motivate people to work more hours. Health care a superior good: The more income people earn the more health care they want. So, health plans should welcome such a reform.

The real obstacle to advancing an alternative to Obamacare will be interests in the health sector, which has mastered Obamacare remarkably. The latest evidence is the first quarter earnings reported by UnitedHealth Group and Hospital Corporation of America, both of which Forbes colleague Bruce Japsen describes as having had the "best Obamacare quarter yet."

Source: John R. Graham, "Health Plan's Mastery of Obamacare Poses Challenges to Repeal," National Center for Policy Analysis, April 22, 2015. 


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