Ensuring Choice and Universal Coverage

National Review Online | Published on August 6, 2013

By Henry Olsen and Brad Wassink

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Conservatives and libertarians have criticized the IPAB “death panel” that Obamacare endows with the authority to make top-down decisions about Americans’ health care. They’ve discussed how mandates for religious employers, businesses, and individuals run counter to the Constitution and the principle of personal choice. They’ve issued calls for Republican governors to resist Medicaid expansion in their respective states in order to impede the law’s implementation.

But now a number of conservative groups have issued a blanket Obamacare ultimatum: “If you fund it, you’re for it.”

Conservatives of all stripes are united in their opposition to Obamacare. But we are not united in what we might want in its place. If not Obamacare, what kind of health reform do we want? How should our values be reflected in policy, and why?

We have failed to engage those questions at a deep level, and we have struggled to articulate and defend our answers in a way that resonates with most Americans. Obamacare is now law, and our agenda for health reform is rooted in opposition — not in making the case for how conservative principles can serve as the foundation for something better.

Today AEI is launching a big-think proposal for comprehensive health reform that aims to fill that gap and spark substantive discussion. Titled “Best of Both Worlds” and authored by eight renowned economists from Harvard, Stanford, the University of Chicago, and the University of Southern California, the plan puts forward a market-based post-Obamacare replacement that guarantees both universal coverage and individual choice. It was formulated to answer a basic question: “If we could design the health-care-financing system from scratch, what would we build, and why?”

The plan itself begins with staples of center-right replacement thinking, such as eliminating the income-tax exemption for employer-based health insurance and providing all Americans with a sliding-scale subsidy to purchase private insurance on their own. It then joins these proposals to a new concept only implied in current center-right thinking: full, individualized, market-based pricing.

Every American would be given enough support to purchase a privately sold and administered catastrophic health-care plan, while private insurers would be freed to (a) use an individual’s health information to price the policy and (b) design whatever other policies it believes consumers would want and pay for. That puts the poor and the rich on more equal footing by replacing Medicaid (widely recognized as a second-tier system) with private coverage. It guarantees universal coverage without mandates by providing a basic plan at no cost to all Americans, with more generous coverage for the poorest and sickest. It introduces greater competition among insurers by fostering competition across state lines. And its substitution for Obamacare saves more than $60 billion over ten years.

By offering a proposal that marries a progressive emphasis on equity and protection with a conservative vision of market competition and choice, “Best of Both Worlds” neatly forces everyone debating Obamacare and health-care policy to confront the basic values at play and therefore to think through their policy implications.

The plan raises tough questions for conservatives and libertarians. Do we find distasteful any flavor of federal financing used to help low- and working-class-income Americans purchase health care? If so, or if not, why?

More broadly, is health insurance simply another commodity that some individuals are able to purchase and others are not? How does that interact with the uniquely conservative emphasis on the dignity of the individual? This plan suggests that health care is not just a service and that Americans’ altruistic impulse favors devoting some funding to a well-designed program that ensures care for society’s most vulnerable.

It confronts progressives with serious questions, too. Though Obamacare will greatly reduce the number of uninsured Americans, it will still leave 20 million uncovered a decade from now. And it is likely to make insurance less affordable for many who are already covered. Are progressives willing to consider an alternative policy that better realizes their overarching goals? Or are they politically yoked to a plan many privately agree is poorly designed and needs substantive overhaul? Are they willing to free up private insurers if it improves coverage and affordability for the poor and the sick? If so, by how much? And if not, why?

Progressives, conservatives, and libertarians all have a duty to articulate and defend the values they want to see reflected in health reform. Progressives must confront the dissonance between the policy objectives they sought in Obamacare and the reality of what the law will likely provide. Conservatives must offer a forward-looking policy agenda that proposes substantive solutions along with their criticism of the current agenda. And they must recognize that any politically successful repeal program must include a replacement component that resonates with Americans’ broader beliefs and personal experiences.

Ultimately, this plan is just one option out of many. But it seeks to foster a discussion that is long overdue.

Henry Olsen is a Senior Fellow at the Ethics and Public Policy Center. Brad Wassink is a domestic-policy researcher at the American Enterprise Institute.