Politics & Policy

Preventing Single-Payer

Republicans’ failure to address health-care costs led to Obamacare, and their failure to act today will result in a single-payer system.

Democrats point to the supposedly existential threat of climate change and the nation’s allegedly inhumane immigration system as reasons to give them control of Congress this November. Yet their failure to prioritize these issues and pass legislation when they controlled the White House, the Senate, and the House during Obama’s first two years in office belie their seriousness. Republicans are currently demonstrating a similar hypocrisy by failing to act on their supposed political priorities, including repealing Obamacare and reducing federal spending and borrowing. Even more dangerously, Republican failure to advance significant conservative solutions to the problems voters care about is setting the stage for Democratic overreach.

Merely enacting temporary tax cuts and repealing some of Obama’s regulations will slow down, but not reverse, the expanding role of government. Reagan was the last Republican president to disrupt the march of progressivism; the Gingrich Congress’s welfare reform was the last significant victory. A majority of voters still prefer effective conservative market-based solutions to their real-world problems, but they will settle for government subsidies and dictates as a second-best solution if Republicans fail to offer an alternative. Republicans’ failure to address rising health-care costs when they were last in the majority led directly to Obamacare, and their failure to act today will result in a single-payer system. It all seems fine now, but remember this moment if and when we get single-payer.

Moderate Republican policymakers err by simply enacting cheaper versions of Democrat proposals, expanding the welfare state, but less generously. The voters targeted by such proposals rightfully reject weaker liberals, preferring the real thing, and these Republicans refuse to learn the hard lesson that they will never outspend Democrats or sate their appetite for government largesse. Their libertarian counterparts argue against any role for government, preferring to preserve their purity to addressing voter frustration, e.g., with rising health-care costs. There is an incremental third option that supports policies that strengthen market-based solutions.

This is not to excuse the failure to repeal Obamacare, or to substitute for continued attempts, but there are stand-alone conservative reforms that Republicans should enact to begin addressing voter concerns about rising health-care costs and strengthen a consumer-driven system.

Just as there have been previous bipartisan efforts to make health-care data more secure and portable for patients, consumers would also benefit from more price and quality transparency. Patients have more information when buying a car than when selecting a health-care provider. Government should not be dictating prices to the market, but it can play an important role in promoting competition. This simple reform could save consumers tens of billions of dollars annually.

Liberals of course often take a good idea and go too far: Obama justified drastic restrictions on health-plan flexibility in the name of easing comparison shopping. Forcing health plans to act like regulated utilities, with severely curtailed ability to innovate on prices or features, is not the solution. It is one thing when Ford tells customers they can have any color Model T, as long as it is black; it is another when government is making that decision.

Other incremental reforms that will reduce costs without harming quality include:

  • Cracking down on frivolous lawsuits and excessive damages.
  • Allowing providers to practice to the full scope of their training.
  • Removing certificate of need and other restrictions on new competitors.
  • Supporting state high-risk pools and other reinsurance mechanisms to assist those with preexisting conditions.
  • Allowing consumers to purchase insurance across state lines.
  • Giving individuals purchasing their own health care, the intended beneficiaries of Obamacare, access to the same benefits of group purchasing and tax-advantaged spending enjoyed by those who get their health insurance through their employers.

Trump’s varying responses to rising drug prices are a testament to the clash between the populist potency of the issue and traditional Republican defense of the industry. Democratic proposals to have government set prices will surely deter innovation and future investment, but Republicans cannot simply protect the status quo. The Food and Drug Administration has sped up approval of generic-drug applications, increasing price competition, and Commissioner Scott Gottlieb has prioritized cases where no cheaper alternative currently exists. There are bipartisan reforms that would go further — for example, forcing brand companies to provide samples to generics, denying patent extensions for meaningless changes, and cracking down on payments from brand companies to generics to prevent competition. Innovator companies deserve the patent exclusivity they earn for bringing new cures to market, but these abuses make a mockery of the free-market system and, if not corrected, invite more drastic interventions.

Republicans are right to continue pushing for giving states more control over their Medicaid programs, in the form of grants and a federal focus on outcomes rather than process, but there are smaller steps they can take in the meantime. Seema Verma, administrator of the Centers for Medicare and Medicaid Services, is allowing states to impose work requirements and more rigorous eligibility verifications on the able-bodied, copying the successful welfare reforms of the 1990s, which will encourage self-sufficiency and return Medicaid to being temporary assistance for many. Republicans can go further by giving states more flexibility over benefit design and cost-sharing and encouraging premium-assistance programs, which help beneficiaries purchase private coverage rather than enrolling them in a one-size-fits-all government-run program.

Republicans have an opportunity and obligation to lead. That is the consequence of winning elections. The best way to have prevented Obamacare in the first place was to render it unnecessary by showing the superiority of market-based solutions. Now is the time for Republicans to address voter concerns, preempt a single-payer system, and pressure red-state Democrats to vote for commonsense reforms.

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