Obamacare was enacted more than five years ago, and is now in its second year of nearly full implementation, but, in political terms, it is still not a settled matter. Republicans remain nearly unanimous in their opposition to the law, which continues to inspire widespread unease among the larger electorate. Many of its most important provisions — for instance, the individual mandate, the Independent Payment Advisory Board, and the “Cadillac” tax — are so unpopular that even many Democrats would like to see them repealed.
But this does not mean full, or even partial, repeal is a foregone conclusion. President Obama got many things wrong in 2009 and 2010 when he pushed Obamacare through Congress, but he got one big thing right: Health care in the United States needed reform. Most voters dislike what passed in 2010, but they aren’t eager to go back to the pre-Obamacare status quo, either. Thus, the longer the law is in place, the harder it will be to roll back.
Realistically, Republicans have one last chance to reverse Obamacare, and that is by making repeal and replacement of the law a prominent theme in the 2016 presidential campaign, and then winning the election. This is the only way to convince voters that there is a better approach to providing secure, high-quality health care than Obamacare’s government-centric system.
Jeb Bush clearly understands what’s at stake. The former Florida governor and current candidate for the Republican presidential nomination released a reform plan yesterday that is a more-than-viable Obamacare alternative. It is a very strong proposal that builds upon years of growing consensus within the party over the essential components of an Obamacare replacement.
The key features of Bush’s plan are:
- Retention of employer-based health care. Unlike Senator John McCain in 2008, Governor Bush does not propose to eliminate the tax preference for employer-paid insurance premiums. In fact, he wants to give employers more authority to run their plans as they see fit, especially by giving them more leeway to implement health-promotion incentives. Bush does propose to place an upper limit on the tax preference, at $12,000 for individual plans and $30,000 for family coverage. These levels are above the thresholds for the “Cadillac” tax included in Obamacare.
- Tax credits for those without an employer-based plan. Bush proposes to give all working-age households without access to employer coverage a tax credit for the purchase of health insurance. The amounts of the tax credits are not specified, but they are clearly intended to ensure all Americans have access to insurance that provides protection against financially ruinous medical expenses.
- Continuous Coverage Protection. Obamacare attempted to solve the problem of pre-existing conditions by simultaneously outlawing the use of health status in insurance coverage and requiring all Americans to purchase a government-approved plan. The Bush plan comes at the problem from the opposite direction, by providing protection to anyone who stays continuously insured, ensuring that their health status cannot be used to raise their premiums or limit their coverage. Only persons who voluntarily opt out of insurance could be subjected to such treatment under Bush’s plan. States would be allowed to implement alternative insurance requirements of their own, but only if they provided similar assurance that people with pre-existing conditions would not be penalized based on the costs of their medical care.
- State Flexibility and Medicaid Reform. States would be given the freedom to take Medicaid and other funding in the form of a capped allotment that the state would control and use to promote insurance coverage and better health for low-income households. Bush clearly intends to give the states substantial room to design programs independently of most federal restrictions. States would be held accountable for producing results rather than clearing bureaucratic hurdles.
- Other Changes and Transition Provisions. The Bush plan would also liberalize the contribution levels for Health Savings Accounts (HSAs), modernize the Food and Drug Administration’s process for approving new drugs and treatments, increase funding for the National Institutes of Health, and provide support and regulatory space for private-sector innovation in medical services. The plan also wisely notes that it will be necessary to provide transition provisions for the many millions of people who are enrolled in Medicaid or in an insurance plan offered through the Obamacare exchanges. Obamacare is unpopular in part because of the massive and unproductive disruption it has caused for so many people who already had health insurance. Republican plans to replace Obamacare should not be so careless.
In broad terms, this plan resembles the proposal offered by Senator Richard Burr, Senator Orrin Hatch, and Representative Fred Upton, as well as the plan designed by Representative Tom Price. There’s a reason for that. There are only so many ways to advance a politically realistic, market-driven reform plan that does not unnecessarily disrupt coverage for the many tens of millions of Americans already enrolled in good, employer-sponsored plans. The authors of these proposals have all started with the same set of objectives, and therefore came to very similar conclusions about what to propose.
There’s reason to be optimistic about the prospects for rolling back Obamacare in 2017 because there seems to be a general sense among the candidates that the nominee will need to propose a solid alternative plan as part of the campaign. In addition to Bush, Senator Marco Rubio and Governor Bobby Jindal have already proposed replacement plans, as did Governor Scott Walker before he suspended his campaign. It is very likely that some of the other GOP candidates will be offering their own plans, too, before the voting begins in early 2016.
So the odds are improving that whoever emerges as the nominee in 2016 will be someone well positioned to make the case against Obamacare, having already proposed, or embraced, a politically viable and better alternative — one that is more consistent with the preferences of the electorate. If that nominee makes the case for this alternative persistently and consistently during the campaign, there will be real hope for a massive change in direction when the next administration takes office.
— James C. Capretta is a senior fellow at the Ethics and Public Policy Center and a visiting fellow at the American Enterprise Institute.