Friday, April 19, 2013
Cost Estimates for an Obamacare Replacement Plan
This week, the American Action Forum (AAF) released a white paper I co-authored with AAF’s President Doug Holtz-Eakin. The paper provides new insurance coverage and cost estimates for the Obamacare replacement plan I developed in collaboration with many other health policy analysts over the past two years. (The replacement plan was described in two published articles: the first, co-authored by Robert Moffit of the Heritage Foundation, appeared in the spring 2012 edition of National Affairs; the second, published as a white paper by the American Enterprise Institute, provided some additional details about the reform plan.)
The AAF cost estimates are encouraging. They show that a replacement plan built on a decentralized, market-based reform program can broaden insurance coverage dramatically without the massive federal power grab and mandates of Obamacare. This is an important development. It demonstrates that, contrary to the talking points of the 2010 law’s apologists, there are viable, practical alternatives to Obamacare that have the potential for broad appeal with the American people.
The emergence of AAF’s modeling capacity — the Health Economic Policy Simulation System (HEPSS) — is also an important advance. It means that a new source of credible analytical information is now available to the policy community, and more information about the cost and coverage consequences of various reform plans can only help to improve the caliber of the public debate. Moreover, the estimates produced by HEPSS will almost certainly differ from those produced by the Congressional Budget Office, the Urban Institute, and others because the HEPSS model uses different sources of data in some respects (including more extensive data on the use of high deductible health plans by employers) and because every model requires the use of some assumptions, and there’s no reason to expect the HEPSS assumptions to exactly match those used by CBO and others.Obamacare is now being implemented, but that does not mean the debate over the future of American health care policy is over. Quite the contrary. Obamacare has far too many fundamental flaws for this debate to be over. At some point, the public will be receptive to hearing about alternatives to the current law, and opponents need to be ready with a fully developed answer. The paper released today is far from the final word, but it is another step in the right direction.