A Conservative Case for Obamacare?
Are the individual mandate and health-insurance exchanges conservative ideas?


ACA Exchanges: more politics than markets
Kleinke argues in his op-ed that health-insurance “exchanges” are a conservative idea, but the same term often has very different definitions. When liberals talk about exchanges, they highlight standard benefits, regulatory policing of market variation, active purchasing roles by government officials to control prices, and large cross subsidies from younger, healthier, and more self-sufficient Americans to older, unhealthier, and more dependent ones. Conservatives talk about more choices, stronger incentives to stay healthy and make smarter decisions, “market” competition with willing buyers and sellers, and privately managed exchange options.


The conservative approach to health exchanges includes:

opposing federally run exchanges (both for policy and legal reasons; for the latter, see last month’s amended lawsuit by the State of Oklahoma);

restructuring any state-administered ones to emphasize open competition and approaches that are both information-heavy and regulation-light and that would not comply with the ACA’s designs; and

focusing more on improving the non-exchange market for individual and small-group insurance. 

Health-insurance exchanges have a checkered and incomplete history at best. Theoretical concepts for new health-benefits marketplaces have come and gone in different forms for at least a couple of decades, but the goal of establishing marketplaces that would be sustainable has been elusive. The Federal Employees Health Plan offers some possible lessons, but it operates differently than non-employer-based exchanges do. Other business-group purchasing ventures have lacked either the scale or the time frame to allow us to draw conclusions about how larger exchanges would work in practice.

Government-run exchanges also have a mixed record. Massachusetts Health Connector’s subsidiaries have failed to gain much market share among populations for which it does not serve as a source of subsidies. The early versions of Utah’s exchanges are much more market-oriented, but they have yet to demonstrate substantial appeal to new customers. 

The ACA version of full-strength, HHS-sanctioned exchanges looks like a political “solution” that will create bigger political and market problems than it will solve. Moreover, the traces of conservative Republican DNA within exchanges (outside of Utah) are too minuscule to show up in falsifiable lab tests. Just look at decisions made by most states run by Republican governors, who continue to balk at signing on to the ACA-compliant state exchanges.

What to Do about romneycare?
Mitt Romney presided over a four-year period of health policy in the Bay State that may have technically been “Republican” but certainly wasn’t conservative or market-based. The best that can be said is that although Governor Romney won’t admit he was wrong, he has promised (at least during most days on the campaign trail) not to do it again on a national scale. 

Our motto should be “What happened in Massachusetts should stay in Massachusetts.” The alternatives ahead in health policy offered by the current White House team are too disastrous to countenance. To revise the infamous Lincoln Steffens quote from 1919 about Soviet Russia, “I have seen the future of Obamacare, and it does not work.” So, instead of investing too heavily in health-policy change that originates from the Oval Office, more effort should be placed on changing the broader political context within which our next president will act, in the hope that he will be compelled to ratify the better policies advanced by others.

beyond repeal
Is there really a replacement plan that goes beyond new ways to say “no”? Yes, there are a number of elements out there, but don’t expect to see them advanced immediately by Republican leaders who are focused on the negative case against Obamacare and on the soothing platitudes of “the market and the states will do it” but who don’t bother much to figure out how. The real centerpiece of conservative health reform over the past decade was health-savings accounts and consumer-driven health care. They remain necessary but are far from sufficient. The frequently recycled association-health-plan proposals were not terrible ideas, but they remained extremely limited, appealing to too narrow a constituency while bypassing the more fundamental problems of our health-care system. Not surprisingly, they faded away quietly from the front lines of the debate.    

The conservative case for health reform doesn’t appear on the editorial pages of the New York Times. It includes defined-contribution financing of all taxpayer subsidies for health coverage, premium support for Medicare, accountable block grants to the states for Medicaid, retargeted subsidies for a sustainable safety net, health-insurance regulation that relies on enhanced information and vigorous competition instead of mandates, and many other less-well-known items. But most of all, it involves restoring and strengthening accountability in health-care decision-making. Not one-way accountability to the wishes of vote-buying politicians and their interest-group allies, but the two-way responsiveness that mediates the personal choices and complex trade-offs made every day by individual patients and the providers who serve them. 

That’s a case we can believe in and should act on, rather than dreaming that the imminent nightmare of Obamacare will end on its own.

 Thomas P. Miller is a resident fellow at the American Enterprise Institute and co-author of Why ObamaCare Is Wrong for America.