mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Everyone Wants to Reform Obamacare


With a consensus now more or less formed that the Obamacare implementation faces serious challenges, pundits are increasingly pivoting towards discussing solutions, both short and long term. Short term, there’s increasing bipartisan support for delaying the penalty for not complying with the individual mandate, under the logic that you can’t punish someone for not getting insurance when the website still doesn’t work. Senator Jeanne Shaheen (D-NH) has voiced support for this kind of delay, and Senator Marco Rubio (R- FL) has introduced a bill to that effect.

But the more interesting discussion is about long-term plans, looking several years out, that would build on the infrastructure Obamacare sets up while eliminating its worst features. Tyler Cowen breathed new life into this discussion with a recent op-ed that proposed a plan that he thinks could win bipartisan support. At the heart of Cowen’s plan is a bid to essentially eliminate Medicaid by shifting all its users into the subsidized ACA-style exchanges, while modifying the health care mandate so it only requires catastrophic coverage.

This model has a lot to recommend it, because it includes key aspects of two of the more successful health care systems internationally: Singapore and Switzerland. Catastrophic plans would force consumers to shoulder more of the financial burden of their own care, just like Singaporeans do, and putting everyone into the exchanges could bring the US closer to Switzerland. In recommending building on, rather than eliminating, the exchanges, Cowen is echoing a suggestion made earlier this year by Douglas Holtz-Eakin and Avik Roy.

As Ross Douthat has pointed out, an exchange-based reform is ultimately friendlier to conservatism than most other reforms that are being discussed right now. In an ironic twist, conservatives could have more to gain from seeing the basic exchange approach succeed than liberals would. If the exchanges work, then GOP wonks can use them as a baseline for the kind of reform Cowen recommends. But if they fail, liberals could use them to provide good cover for a single-payer pivot.

Features Icon
show comments
  • Parker O’Brien

    I don’t disagree that the left will use the failure of exchanges as a reason to pivot towards single payer, but I have a strong disagreement that it is ‘good cover.’ If the government can’t even manage to create a system that simply allows people to sign up for insurance, why in the world would we expect better results by putting them in charge of the insurance or healthcare directly?

    Unfortunately Ted Cruz has been right all along. Now that Obamacare is the law of the land, it is the new baseline for government intrusion into our lives.

  • Anthony

    To create a better health care system is conundrum: single-payer health care system, free market health care system, employer sponsored health care system, reform of seller/provider health care system, et al. At least, ACA has engendered more health care policy engagement by which country may yet benefit..Tyler Cowen’s proposal, though inventive, shifts cost (from state to federal) but does not account for continued seller (provider) capture of health care market. Implied in his proposal is both expansion of federal expenditure and private market capture but it adds to policy ideas.

  • qet

    Whether the government establishes itself as the single-payer, or whether it controls HC through the by-now-quasi-public-agencies that so-called private insurance companies have become, is immaterial. The current exchange-based plan will work only if and to the extent that the government subsidizes premium payments and/or provides a sort of stop-loss backstop to the exposure of the private insurers. The amount of those subsidies/make-whole payments will necessarily (as in, necessarily politically) increase year over year, and, as with social security, we will face another out-of-control “unfunded mandate” with some people arguing that “no, Obamacare is perfectly solvent” and others saying “no, it’s insolvent.” meanwhile it won;t matter, because there will be no getting rid of it. It can evolve in only one direction–toward the government’s appropriation to its total control the delivery of all medical care. Whether through a NHS-style arrangement or using nominally private entities–like large hospital concerns who will be the direct employers of doctors and the owners of all capital equipment like MRI units etc.–is equally immaterial.

  • Nick Bidler

    on one hand, limiting it to catastrophic insurance would spread out the costs of that whole ERs-not-allowed-to-turn-away-patients thing, which is effectively being spread around anyway.

    on the other hand, if everyone has catastrophic insurance, there is no need at all to insure for routine costs… wait, that would be a good thing anyway, because the point of insurance is to guard against sudden spikes, not pay for routine expenditures.

    so the only real complaint i have with this compromise would be that boycotts of federally mandated purchases would be illegal, and still means that the government can punish inaction as well as actions.

    tl;dr: function would be great but still presents nightmare civil liberties issues.

  • Jacksonian_Libertarian

    I want a law that anything more than Catastrophic Health Insurance with Health Savings Accounts, is illegal. Reforming Obamacare is a foolish waste of time and money, and will do nothing to improve the Quality, Service, and Price of Healthcare, which only the feedback of competition provides.

  • BrianFrankie

    Tyler Cowen’s proposal does have a lot to recommend it, but he is deluding himself if he thinks it can garner bipartisan support. These reforms move in precisely opposite the direction that the leading elements of the Democratic party wish to.

    They do not want health care insurance to be for catastrophic expenses. They want it to cover all expenses, including routine care, essentially taking the “insurance” out of health care insurance and turning it into communal prepaid medical care. This is why the regulations for Obamacare have been so very extensive and prescriptive. Just to take one of the better known examples, HHS declared that “insurance” policies must cover contraception. Really? Nothing against contraception, but isn’t this exactly the sort of thing an individual should sort of be able to plan on and afford for themselves? I mean, it is a bit of a different category from crossing a street and getting hit by a bus.

    Likewise, they do not want Medicaid eliminated – they want to expand it to as much of the population as they can. Just providing subsidies to people and allowing them to make their own arrangements inevitably means that some people will make bad choices and not be adequately covered. Obamacare, and the Obama-segment of the Democratic Party are entirely opposed to allowing such autonomy to people, and will resist this proposal fiercely.

    If the Clinton era “New Democrats” and the DLC were still around, then a bipartisan agreement along the lines of Mr. Cowen’s proposal might be conceivable. But those people have been either purged or demoted to positions of no influence. An agreement along the proposed lines is not possible.

  • charlesrwilliams

    Delaying the penalty is an irrelevancy since the penalty is trivial. With the exception of the Medicaid expansion, Obamacare will increase the number of people without insurance. Many people have lost their insurance already for 2014. Many more will be unable to afford an Obamacare policy, with or without a subsidy. Many people will lose coverage through their employer. And, of course, there are the people who will give up on the website. Some insurers will go bankrupt because the customer mix will be radically different from the mix built into their pricing. Next year the price of Obamacare insurance will be much, much higher.

    Health care is 1/6 of the economy. We are facing a wrenching transformation beginning in January.

    This will be a catastrophic disruption of many people’s lives. Delaying the mandate will do nothing to address this catastrophe.

  • ljgude

    The Swiss system costs 11% of GDP and is the second most expensive in the world. The US is number 1 at 16% of GDP. At 16% that’s 4% of our 15 trillion GDP that, shall we say, is dubiously expended. The good news is that US health outcomes are only slightly worse than a lot of countries further down the cost list than Switzerland. Ironically our doctors deliver better value for money than some other professions that no doubt come to mind. And oh yeah, the ACA caps healthcare expenditure to 17.5% by 2017. Now that is what I call world class hog calling.

  • f1b0nacc1

    Nuke it from orbit, it is the only way to be sure…

  • Kimo

    Don’t mend it, end it. It’s the only way. It’s destroying the country.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service