The attempt by the mismatched team of Donald Trump and Paul Ryan to repeal Obamacare has failed. In the wreckage, there might be an opportunity for genuine, market-oriented, and humane reform of health care financing.
The Republicans are paralyzed. The GOP moderates have, without quite saying so, come to accept Obamacare. What they can’t admit to their own voters is that they see their role as the new protectors of Obamacare from Democrats who will now use every opportunity to push for single-payer health insurance and centralized government rationing.
Republican conservatives would like to repeal Obamacare—or anyway, that’s what they say they want. They remain morally conflicted about what will happen to those who now receive health insurance from Obamacare’s Medicaid expansion and exchange subsidies. They also fear the electoral impact of millions of voters losing insurance.
The vast majority of Republicans just don’t have much of an ideology relating to health care. They don’t want to be more pro-Obamacare than the Democrats (the logic of the GOP’s left), and they don’t want to strip millions of Americans of health insurance. This is especially true of many of the working-class swing voters who voted for Obama in 2008 and for Trump in 2016. The good news is that there are answers to their concerns.
Conservative health care experts have laid out an alternative set of policies, many of them in the journal National Affairs. These policies include catastrophic health insurance and expanded use of health savings accounts for people who can’t get employer-provided health insurance. They include market reforms that encourage new medical providers to enter the market and force medical providers to be transparent about their prices. They include tax credits and pre-filled HSAs for the indigent, along with government-subsidized high-risk pools for people who are currently outside our insurance system and have expensive medical conditions. They include automatic enrollment into catastrophic health insurance policies (with an opt-out clause) for those who don’t sign up for insurance plans.
That’s the good news. The bad news is that there is no organized constituency for this set of policies. The traditional conservative small-government lobbies won’t be thrilled with them, because they involve greater government spending (and therefore greater taxation) than the pre-Obamacare status quo. Medical providers, who prefer to minimize competition and transparency, won’t like them, either.
The only people who might support such policies are the voters. The beneficiaries would be people who don’t especially like Obamacare and rising premium costs, but who know that they (and their friends and relatives) are one layoff away from losing their health insurance.
That is basically the constituency Donald Trump mobilized. Trump showed that there were millions of Republican voters (and potential Republican voters) who did not prioritize keeping down the tax rates of the affluent above every other concern.
Perhaps appropriately, market-oriented health care reform needs political entrepreneurs who will mobilize those millions of Americans who don’t have lobbyists but who would benefit from more secure and cheaper health care. The argument would be that if these voters work hard, they won’t be left out in the cold. They might even get bigger paychecks, because their premiums might go down. If they are willing to shop a little for their routine care, they might well end the year with cash left over in their health savings accounts.
This reform message would fit in with a broader pro-work and pro-family agenda, involving expansion of the child tax credit, reduction of future low-skill immigration, provision of work-relocation subsidies, and reform of the disability system. Such a populist program might turn out to appeal to some Democratic voters who don’t especially like taxes and regulation, but who scorn the GOP as the party of rich whites. A newer, better conservative populism might help bridge the gap between working-class white swing-voters and moderately conservative nonwhite voters.
This kind of conservatism would not be the first choice of the business lobbies. They would prefer a system with lower taxes (on them) and lower labor costs (which is to say lower wages) for everybody else. That is fine. The trick is in letting them know that their first choice is not available.
The Democrats are moving left on economics. They are already using the failure of the Obamacare repeal to move closer to single-payer health insurance—and the extremely high taxes to pay for it. The question is what will be the alternative to the creeping socialism of the left.
If populist conservatives can rally a constituency in the Republican primaries, the business lobbies would face a choice. Would they rather live in a world with slightly higher taxes but an otherwise less regulated and more growth-friendly environment—or in an America remade by the disciples of Bernie Sanders?
Pete Spiliakos is a columnist for First Things.