Republican Obamacare plan signals that liberalism has already won
In releasing their healthcare plan on Monday, House Republican leaders sent a signal loud and clear: liberalism has already won.
Barring radical changes, Republicans will not be passing a bill that ushers in a new era of market-based healthcare. In reality, the GOP will either be passing legislation that rests on the same philosophical premise as Obamacare, or will pass nothing at all, and thus keep Obamacare itself in place.
Going into the healthcare debate in 2009, there was a clear clash of healthcare visions. Those on the left, whose ideal would be a single-payer system, at a minimum wanted to expand the role of government and use a combination of subsidies and regulations to move the United States in the direction of national healthcare.
Those on the right envisioned a different system that migrated away from a world in which most people obtained coverage through government and their employers, into one in which individuals controlled their healthcare dollars, could take their plans with them from job to job, and choice and competition drove down cost and improved access.
With Democrats in power Obamacare passed in 2010, triggering seven years of political resistance among Republicans. When President Trump was elected, there were a lot of news articles about how it meant the end of the Obama legacy. But the real test is whether, at the end of the day, Obama moved the ball forward for liberalism even after Trump’s efforts to undo his policies. On healthcare, if this bill is any indication, the answer is clear that Obama moved the ball.
I’ve already shared my skepticism that the bill, which doesn’t actually start repealing the major spending provisions of Obamacare until the 2020 presidential election, would actually end up repealing much in practice. But for the sake of argument, let’s just assume the plan gets implemented exactly as written.
Supporters of the bill could argue that it does make changes to Obamacare – repealing taxes, reducing spending and scaling back some mandates and regulations. There are even a few areas in which one could argue the bill moves health policy in a more conservative direction relative to the pre-Obamacare status quo. It provides for expanded health savings accounts and, though it would spend more money than otherwise would have been the case before Obamacare, it would overhaul Medicaid into a program in which states are given a per capita grant and provided the flexibility to run their own programs.
But at the same time, the GOP bill preserves much of the regulatory structure of Obamacare; leaves the bias in favor of employer healthcare largely intact, replaces Obamacare’s subsidies with a different subsidy scheme, and still supports higher spending for Medicaid relative to what was the case before Obamacare.
Ultimately, it doesn’t do much to foster the development of a free market system. Under GOPcare, individuals would not be able to take insurance with them from job to job, because tax credits would not be available to people who have an offer of job-based insurance. They would not be able to purchase whatever plan they want, because the federal government will still be dictating what has to be in insurance policies, making insurance more expensive then it needs to be. If this bill passes, everybody would have to get their insurance either through government, their employer via tax subsidy, or be left to purchase government-designed health policies using federal subsidies.
Now to be clear, there are still arguments that can be made about whether, even in the face of these realities, it would be worth it for conservative members of Congress to suck it up for the bill. As I put it last week, “At some point, is Obamacare Lite better than Obamacare Heavy?” That is, whatever objections can be made about the GOP bill, there is an argument that conservatives should still vote for it because it taxes less, spends less and regulates less than would be the case if they torpedoed this bill and Obamacare remained intact. On the other hand, there is an argument that if conservatives know this bill is a turkey and will fail, it’s better that they don’t embrace it, so that the “free market” doesn’t get blamed for the failures of a big government policy. Also, there is an argument that left on its own, Obamacare will begin to fail as more insurers drop out of the market due to mounting losses.
Whatever the argument is as to whether voting for the Republican plan is better than doing nothing, objectively speaking, it is not a free market plan. It still rests on the premise that the federal government should play a significant role in subsidizing and regulating insurance markets in an attempt to ensure broad coverage. Thus, despite the political failures that resulted from Obamacare, the clunky legislation still moved the ball ideologically to the left. The argument isn’t over whether the government should require all insurers to cover people with pre-existing conditions. The argument is about whether the government should pay for it by forcing healthy people to purchase insurance under the threat of a penalty, as Obamacare does, or by threatening anybody who doesn’t maintain continuous coverage with a 30 percent late fee, as the GOP prefers. Liberals, in other words, have won the central philosophical argument, and Republicans are reduced to fighting over the mechanics.