Politics & Policy

Ted Cruz’s Health-Care Solution

(Reuters photo: Joshua Roberts)
He offers a conservative way out of the Senate’s debacle.

While promising to repeal and replace Obamacare over the last seven years, Republicans began to adopt the dangerous metrics and mindset of the Democratic party. Overnight, it seemed, Republicans were assuring the public that their plan would cover as many people as Obamacare does. Pretty soon, despite having lambasted the individual mandate as unconstitutional, the GOP began soft-pedaling backdoor mandates as a faux free-market alternative. With the passage of the House’s American Health Care Act and the deliberation of the Senate’s Better Care Reconciliation Act, the GOP’s leftist commitment to artificially inducing — or mandating — consumer demand for health care seemed unshakable.

Enter Ted Cruz.

Critics speculated that Cruz was merely bluffing when he publicly came out against the initial version of the BCRA along with Rand Paul, Mike Lee, and Ron Johnson — but then Cruz began passing out memos entitled “Path to ‘Yes,’” which detailed the four concessions required from Senate majority leader Mitch McConnell to earn Cruz’s vote. The most significant of those points, a consumer-freedom option allowing insurance companies to sell non-Obamacare-compliant plans so long as they sell at least one Obamacare-compliant plan as well, may actually be coming to fruition.

As reported by Vox’s Dylan Scott, Cruz has not yet shared a written amendment, but he has begun to negotiate the proposal with an increasingly desperate McConnell, who cannot afford to lose the votes of Cruz, Paul, Lee, Johnson, and a few undecideds if Susan Collins and Dean Heller vote no. (Because the BCRA is a reconciliation bill and cannot be filibustered, it needs only 50 votes in the Senate plus a tie-breaker from Vice President Mike Pence. But there are just 52 Senate Republicans.) In short, Cruz is fighting for a parallel market of unregulated insurance plans alongside Obamacare plans, which will remain subsidized via the BCRA’s $50 billion bailout so as to avoid an immediate death spiral.

Cruz’s proposal is not just politically necessary, but also a vital and wildly relieving return to conservative policymaking that lowers prices and increases coverage by inducing supply rather than demand. The return of high-deductible, low-premium plans will bring young people back into the market without completely abandoning the few popular Obamacare provisions that gave older, sicker Americans better access to health care. The relaxation of regulations, though partial, will encourage more insurers to enter the market, increasing supply and bringing down premiums, at least in theory.

Obamacare coerced Americans to purchase insurance from an already small number of providers, and then tacked on more regulations so only the largest providers stayed in the market — resulting in an effective cartel or monopoly, depending on the county. This did reduce the number of Americans without insurance, but at the price of risk pools depleted of young, healthy people to share in the costs of unhealthier people, Medicare reimbursement rates slashed for physicians (a threat to health-care supply because such cuts reduce the returns to doctors’ labor), and skyrocketing premiums.

Without McConnell making this concession, the BCRA is a series of tax cuts reversing Obamacare’s economic redistributionism, a bailout for the Obamacare exchanges, and a Medicaid reform that will happen only if the Republican party can stay in power for the next decade to see the defunding through. For taxes and federal spending, the BCRA would be good in its current form, but it would not fix the fundamental problems with Obamacare. It may halt the death spiral or alter the trajectory of premiums over the next decade, but it would still mostly fail to attract more insurers and more plans into the marketplace.

Cruz may have filled the vital role of principled conservative and, strikingly, the compromiser of the Senate.

Given recent reports that McConnell will increase opioid-addiction funding and further reduce Health Savings Account regulations, he seems ready to play to win over the last, necessary holdouts. McConnell is hardly an ideological visionary, but he is a master whip. Cruz may have filled the vital role of principled conservative and, strikingly, the compromiser of the Senate.

The Republicans have not yet abandoned the teleological notion that the role of government is to maximize the amount of Americans insured, but Cruz’s proposal marks a pointed departure from the type of thinking that has plagued the GOP since assuming the presidency. And perhaps, this success for capitalism would take us one step closer to finally achieving a free market for all.

READ MORE:

Ted Cruz: Health-Care Reform Mediator

Republicans’ Grim Health-Care Fairy Tale

The Republican Health-Care Mistake

— Tiana Lowe is an editorial intern at National Review.

Tiana LoweTiana Lowe is a senior pursuing her B.S. in economics and mathematics at the University of Southern California and a former editorial intern at National Review.

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