A State-Based Initiative
Countering Obamacare in Louisiana and elsewhere.


James C. Capretta

The federal government is a very powerful force in the health sector, but it’s not all-powerful. Large employers and the states still have a voice: They provide insurance to tens of millions of Americans, giving them some influence over the way doctors and hospitals are organized to deliver care.

That influence will recede if the Obama team gets its way. The president-elect, along with Tom Daschle (nominee-in-waiting for secretary of Health and Human Services) and many powerful Democrats in Congress, have their sights set on a massive federalization of American health care.

The Democratic vision for reform would effectively put the federal government in charge of all important health-care policymaking. We would see the establishment of a one-size-fits-all benefit plan, regulation of premium-setting, development of fee schedules for paying doctors and hospitals under a public-insurance option, creation of a new “facilitator” agency through which citizens would get coverage outside of employment, and jump-starting of a massive new initiative to pass judgment on what is and is not “effective” medical care. Indeed, if Obamacare is passed as currently conceived, there should be no doubt that essentially all power and control over the financing and delivery of health care in the United States would shift inexorably and perhaps irrevocably to Washington, D.C.

The most effective way to convince the public of the dangers here is to show them a viable alternative. The logical arena for such a demonstration would be a state or, even better, a number of states. Current federal law provides significant flexibility for the “laboratories of democracy” to experiment with innovative approaches in health care through Medicaid. All that’s needed is an entrepreneurial governor who is committed to markets and consumer choice, understands the complex details of health-care policy, and is gutsy enough to risk alienating established and powerful vested interests.

Does anyone fit the bill? The answer is yes, and not just Bobby Jindal, the second-year chief executive from Louisiana. Indiana’s Mitch Daniels is implementing an innovative plan to expand coverage to low-wage households in Indiana; the plan uses public funds to finance Health Savings Accounts and high-deductible insurance options. (Full disclosure: Governor Daniels was my boss at the Office of Management and Budget from 2001 to 2003.) Mark Sanford of South Carolina and former governor Jeb Bush of Florida also spearheaded aggressive Medicaid-reform programs that emphasize personal responsibility and choice instead of overbearing governmental regulation.


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