repeal and replace


How to Replace Obamacare

I have an article in the new issue of National Affairs on “How to Replace Obamacare”:

...repeal will not be enough, for a simple reason: Although Obamacare would worsen many of the problems with our system of health-care financing, that system clearly does call out for serious reform. Despite the widespread public antipathy toward the new health-care law, simply reverting to the pre-Obamacare status quo would be viewed by many Americans, perhaps even most, as unacceptable. After all, a repeal-only approach would leave many of the most grievous flaws in our system of financing health care unaddressed. Chief among them would be steadily rising health-care costs, driven by the same misguided government policies that so evidently demand reform.

If the problems that are today obvious to the public had been addressed by market-oriented policies over the past few decades, there would have been no political opening through which to ram Obamacare. Instead, these problems were allowed to fester; by 2009, they had become so acute that there was strong sentiment, even among some business-oriented conservatives, that "something had to be done." And as the 2010 congressional debate over Obamacare reached its climax, this sentiment — that some action, even an imperfect one, would be better than nothing — likely played a large role in enabling the health-care law to pass.

This history suggests that, now that Obamacare is with us, the law cannot be reversed without a credible proposal for what should take its place. Those reforms must account for both the strengths and the weaknesses of our health-care system, and must solve the problems that contributed to the demand for Obamacare in the first place. There is room for debate about the particulars of these reforms, and different components of our health-care system will call for different kinds of fixes. What any effective solution must involve, however, is the creation of a true market in health coverage — one that drives efficiency through competition, and places health-care decisions in the hands of consumers and taxpayers, where they belong.

The entire article is available online here.

posted by James C. Capretta | 12:49 pm
Tags: Obamacare, repeal and replace
File As: Health Care

The Reconciliation Option

Over at National Review Online, I have a new column up on a special budgetary procedure known as “reconciliation,” which was mentioned by Mitt Romney and Rick Santorum at last Tuesday’s Republican presidential debate as an option for repealing Obamacare:

If, in the 2012 election, Republicans are able to maintain control of the House, pick up the majority in the Senate (a real possibility) but not a 60-vote supermajority, and win the White House (looking more possible by the day), the GOP would be in position to set in motion a reconciliation bill to repeal and replace Obamacare — and they wouldn’t need any Democratic cooperation to make it happen. The fact that leading Republican presidential candidates have now said that reconciliation is an option is a big deal, as it makes it very clear to all concerned that there is a clear path to victory for Obamacare opponents.

Seeing the threat that the reconciliation option could pose, Obamacare’s apologists have responded by suggesting it would be the height of cynical partisanship for Republicans to undo Obamacare in this fashion, since reconciliation supposedly played only a minor role in the enactment of Obamacare. Obamacare’s defenders also claim that, in any event, the GOP may not be able to pull it off because some aspects of Obamacare are non-budgetary and therefore aren’t eligible for repeal in a reconciliation measure, which is supposed to deal exclusively with budgetary matters. Sen. Kent Conrad, the Democratic chairman of the Senate Budget Committee, took the argument further and said that using reconciliation for repeal would be inappropriate because reconciliation is supposed to be used fordeficit-cutting efforts — and Obamacare’s full repeal would increase the deficit, according to the Congressional Budget Office (CBO).

As usual, there’s a lot of smoke and misdirection in these arguments, and not much clarity....

You can read the whole column here.

posted by James C. Capretta | 1:01 pm
Tags: Obamacare, repeal and replace, reconciliation
File As: Health Care

Defined Contribution Health Care

Yesterday, I had the privilege of participating in the inaugural event for the American Enterprise Institute’s new “Beyond ‘Repeal and Replace’” initiative, the purpose of which is to explore policies that could take the place of the recently passed health care law. During the panel discussion, moderated by AEI’s Tom Miller, I provided an overview of the paper I coauthored with Tom called “The Defined Contribution Route to Health Care Choice and Competition.” The defined contribution approach to reform would convert today’s open-ended federal subsidies into fixed levels of support, and thus convert millions of passive insurance enrollees into cost-conscious consumers. A short summary of our paper can be accessed here, and the full paper is available here.

The panel also included Scott Harrington of the University of Pennsylvania, who presented an overview of his paper on “Regime Change for Health Insurance Regulation: Rethinking Rate Review, Medical Loss Ratios, and Informed Competition,” and Steve Parente of the University of Minnesota, who discussed his paper entitled “Harnessing Health Information in Real Time: Back to The Future for a More Practical and Effective Infrastructure.”

Video of the entire AEI event is available below:

posted by James C. Capretta | 10:26 am
Tags: defined contributions, AEI, Thomas P. Miller, Scott Harrington, Steve Parente, repeal and replace, Obamacare

On ‘Repeal and Replace’

I was asked by the New York Times to participate in another of its online "Room for Debate" exchanges. Here's what I submitted:

The Obama administration and its allies are trying to create the political perception that the mandated coverage provisions that are going into effect this year will take the steam out of the repeal effort. That’s very unlikely to be the case. Yes, some Americans will benefit from these insurance requirements, even as many millions of others pay higher premiums to cover the costs.

But these provisions -- both in terms of the benefits provided, and the costs imposed -- are relatively minor in the scheme of things. Much more significant provisions will be implemented in 2011 and beyond.

And these changes won’t be all good news for American consumers. There are large tax increases in the new law, benefit cuts for Medicare Advantage enrollees, and costly burdens for employers that will raise premiums for millions of people with job-based coverage. Moreover, many employers will be reconsidering offering coverage at all based on the new law’s option for putting workers into new state-based exchanges. This will be disconcerting to millions of workers who are perfectly happy with the insurance they have today.

Republicans have said they are for “repeal and replace,” not just repeal, which means they could roll back the new health law even as they put in place new provisions to ensure secure insurance for those benefiting from the mandates kicking in this year. For instance, Republicans support robust funding for high-risk pools, which would allow many more people with pre-existing conditions to get insurance than will be helped by the modest pools in the new law.

The provisions that are going into effect this year aren’t central to the law’s significant changes to American health care. Repeal is resonating with a large segment of the population because much more sweeping changes are in the works, changes that will redistribute wealth, disrupt insurance arrangements that most people find perfectly acceptable today, and create risks for the quality of American health care. Those concerns are not going away anytime soon.

posted by James C. Capretta | 1:29 pm
Tags: repeal and replace
File As: Health Care