2016: What’s Next for Obamacare?

COMMENTARY Health Care Reform

2016: What’s Next for Obamacare?

Jan 15, 2016 2 min read
Nina Owcharenko Schaefer

Director, Center for Health and Welfare Policy

Nina Owcharenko Schaefer is well known as a champion of patient choice and robust competition in America’s health insurance markets.

Obamacare remains unworkable, unaffordable, and unpopular. Its ailments continue to mount: failing state exchanges, collapsing co-ops, higher premiums, higher deductibles, narrow networks, and fewer choices. It should be no surprise that the latest Real Clear Politics average poll shows 50.2 percent of Americans oppose the law, while only 42.5 percent support it.

Those who support the law are in triage mode. Last month the Urban Institute hosted an event discussing the next steps to strengthen and improve the law. Not surprisingly, their solutions were simply more of the same: more government spending, more government intervention, and more government control. Liberal prescriptions for keeping Obamacare afloat would ultimately result in a health care system where providers and patients are beholden to government regulators.

The alternative is patient-centered, market-based reform. A variety of plans have proposed Obamacare alternatives. These plans share a commitment to core conservative principles:

  • making health coverage more affordable by removing regulatory and policy obstacles that discourage choice and competition;
  • encouraging personal ownership of health care by reforming the tax treatment of health care;
    transforming health care coverage to low-income Americans by restoring Medicaid to a true safety net and offering a glide path out of poverty; and
  • modernizing Medicare to meet that program’s demographic, fiscal, and structural challenges.

Recent reports indicate House Speaker Paul Ryan (R-Wis.) anticipates advancing an alternative to Obamacare in 2016. The budget process offers a natural platform for outlining a replacement. From there, the committee work needed to fill in details will be critical. Before Congress embarks on these next steps, it should set some basic policy parameters for any replacement to Obamacare.

  1. Use sound financing. Obamacare added an additional $2 trillion in new health care spending, financed by tax increases, draconian cuts to Medicare and questionable offsets. To be consistent with full repeal, any replacement package should be based on rescinding this new spending and its flawed financing. Conservative health policy experts have long argued that there was plenty of spending in the health care system before Obamacare to fund reform.
  2. Stabilize and liberate the health care market. Obamacare overhauled the health care sector through thousands of pages of legislation and regulation resulting in massive disruption of the market and -- more importantly -- existing coverage of everyday Americans. To avoid repeating this catastrophe, Congress must be careful to organize reforms in a practical fashion. In particular, this includes allowing the marketplace time to adjust to a less prescriptive regulatory landscape before locking in new financing reforms.
  3. Make financing simpler, transparent and direct to individuals. Obamacare’s failures are a result of the law’s fundamental design flaws. As my colleague Ed Haislmaier argues “The complexity and cascade of adverse effects are the inescapable byproduct of the law’s basic design.” Thus, rather than funneling support indirectly to third-party entities for providing care and services, any replacement package should direct financing to individuals so that they have personal ownership and the freedom to choose the health care that best suits their needs.

The Senate’s recent efforts to maximize the reconciliation process to repeal major elements of Obamacare should encourage reformers. Of course, more can be done to expand its reach, but the initiative provided an important test run -- and down payment on lawmakers’ commitment to voters -- to repeal the law.

Reconciliation shows repeal is possible. Now is the time to show that replacing Obamacare is possible too. To do that, Congress should spend the next year building a framework for a patient-centered, market-based alternative that empowers individuals to control the dollars and decisions regarding their health care.

Owcharenko is The Heritage Foundation’s Preston A. Wells, Jr., fellow and director of the think tank’s Center for Health Policy Studies.

This piece originally appeared in The Hill's "Congress Blog."

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