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Year Four of the Obamacare Era
Why conservatives will win the health-care debates of the future.


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Avik Roy

Republicans are likely to get some mileage out of the exchanges’ rough startup. But perhaps not as much as they hope — after all, the exchanges will largely serve those who today have no insurance at all. While those individuals will probably face delays in gaining coverage, they are likely to be insured by the time November 2016 rolls around. And voters who stand to gain subsidized insurance through Obamacare are far less likely to favor repeal. The more potent argument will revolve around how Obamacare increases premiums for those who already have insurance.

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Many conservatives hope that Obamacare will collapse like a house of cards once its policy failures are fully revealed to the public. But policy failures often lead to more government, not less. Take Fannie and Freddie, the government-backed mortgage giants. Despite the housing crisis of 2008, and a taxpayer bailout of $137 billion — so far — Fannie and Freddie are still here, as prosperous as ever. And while European monetary union was clearly flawed from the start, the governments involved have not reacted to the crisis by withdrawing from the euro, but rather by further centralizing their fiscal and banking policies.

In Massachusetts, the fact that Romneycare failed to reduce health-care spending did not lead to a collapse of the system. Instead, in 2012, the Massachusetts legislature passed an additional round of dirigisme, including price controls for hospitals and doctors.

Put simply, Obamacare will not vanish of its own accord.

THE FUTURE HEALTH-CARE DEBATE: COST
Conservatives have to be prepared for the possibility — or probability — that we will fail to fully repeal Obamacare. While that may seem like cause for despair, it isn’t.

For decades, conservatives have been on the defensive when it comes to health care. Progressives have consistently campaigned to expand subsidized health-care coverage. It has been their top domestic priority. Conservatives have opposed these efforts, on account of their cost and their statist bent. Politically, that debate has placed conservatives at a disadvantage, because poor, sick, uninsured people arouse understandable sympathy.

In the Obamacare era, where nearly everyone will be covered, the terms of the debate will change. In the health-care debates of the future, liberals and conservatives will argue not about coverage, but about the cost of health care: in terms both of rising insurance premiums for the middle class and of rising government spending that is funded by taxpayers.

For the Left, reducing health-care costs requires more state control: rationing, price controls, regulations, mandates, and the like. Conservatives have a more appealing message: that we can reduce the cost of insurance, and of government health-care spending, by expanding consumer choice, and by putting Americans in control of their own health-care dollars.

We can repeal Obamacare’s age-rating provision, the one that artificially drives up the cost of insurance for the young. We can repeal Obamacare’s premium tax, which will raise premiums for everyone who has private insurance. We can expand the role of affordable consumer-driven insurance plans, which combine catastrophic coverage with health-savings accounts. We can replace the law’s constitutionally injurious individual mandate with a more voluntary mechanism that encourages affordable coverage.

On these issues, it will be conservatives who have the political advantage. Conservatives will be fighting for lower cost and greater choice, whereas progressives will be making ideological arguments about the virtues of state interference.

REPLACE THE GREAT SOCIETY
Another thing is important to remember: The fact that Obamacare is our most recent health-care entitlement doesn’t make it our worst health-care entitlement. That title belongs to the twin towers of the Great Society, Medicare and Medicaid, which will soon be spending $1.5 trillion a year of taxpayer money. That compares to $200 billion a year for Obamacare when it’s fully implemented.

Obamacare’s exchanges, for all their flaws, are rather similar to what Paul Ryan has proposed for Medicare reform. Unlike Ryan’s plan, however, the Obamacare exchanges are aggressively means-tested and contain no “public option” of a government-run plan. If we do end up stuck with Obamacare, therefore, conservatives can work to gradually move the Medicare and Medicaid populations into these exchanges, saving trillions of dollars over time. All we’d have to do is reform the exchanges in politically popular ways, raise Medicare’s enrollment age, and gradually reduce the income thresholds for exchange eligibility.

Some pessimists believe that these incremental conservative reforms won’t fly, because they will be opposed by the same Democrats who oppose full repeal. But this pessimism misunderstands Democrats’ policy priorities. Democrats are much more concerned with achieving universal coverage than they are with the details of how that coverage is achieved. Conservatives will face steep resistance from Democrats if the effect of their policies is to reduce coverage. They will face much less resistance on the issue of affordability. And Democrats who oppose expanding the role of private-insurance exchanges would have to explain why they voted for them in the first place.

It isn’t fun to assess soberly the likelihood that Obamacare can still be repealed in full. It’s psychologically easier to convince ourselves that nothing has changed since Obama’s reelection, and that repeal will be just as achievable in 2017 as it would have been with a Romney victory in 2012.

But repeal is not the only possibility for a substantive and viable conservative health-care agenda. Indeed, replacing the Great Society with a cost-effective, means-tested, market-oriented insurance system would represent an even greater victory for limited government. All hope is not lost. Indeed, there is as much cause for optimism as ever.

Avik Roy is a columnist at NRO and a senior fellow at the Manhattan Institute. You can follow him on Twitter at @avik.



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