what can or should they do about Obamacare? The current unpopularity of the program is the reason it looks at least possible that they will not only hold the House but get a majority in the Senate. If so, what are their options?
The obvious one is to replace Obamacare with something that moves medical insurance in the opposite direction, towards something more like a free market. One elements of such a bill would be legalizing interstate sales of medical insurance, another equalizing the tax status of individual plans and employer provided plans, which probably means making expenditure on individual plans deductible. Sponsors could plausibly argue that the savings from abolishing the ACA will more than make up for the lost revenue.
Obama can and presumably will veto any attempt to repeal his pet program. The Republicans will not have enough votes to override a veto, so their only hope would be to get enough Democratic senators and representatives to go along. That is going to be hard, but not necessarily impossible, depending on just how badly Obamacare is doing. One critical actor will be Hilary Clinton. On ideological grounds she should be even more adamantly in favor of preserving the program than Obama—but on political grounds she may be looking for a way of avoiding the political fallout from its failure. Organizing Democratic support for something she can plausibly represent as a compromise might be one way of doing so.
There is another alternative. Suppose the House and Senate pass a spending bill with nothing allocated to continued implementation of the ACA. Obama can veto it and force another government shut down. But it is going to be much harder for him to blame a shut down on the Republicans if both houses have passed a budget and his refusal to sign it is the only remaining obstacle.
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What is it about Obamacare that's unpopular? If you poll people about individual features, most of them are overwhelmingly popular, except the individual mandate. So the politically-smart thing to do is repeal that part. Unfortunately, that leaves insurance companies holding the bag for people who sign up for insurance only when they get sick; insurance companies will lobby hard against a repeal of the individual mandate unless it's accompanied by a repeal of the "preexisting conditions" clause. Which is overwhelmingly popular with the American people, and if it were repealed tomorrow, perhaps a million Americans who haven't had health insurance in years (or ever) would lose it again -- not a recipe for winning votes.
OK, so you're thinking of a global change, not an incremental one. Separate comment.
What would a truly free-market answer look like, if we tore down the whole structure of Obamacare (and some of the structure of health insurance that preceded it, like the limits on interstate insurance sales)?
You negotiate with insurance companies exactly what health insurance you want and how much you'll pay for it. If your employer chooses to offer health insurance as part of the employment package, the employer does the same. Individuals in this market would be in a weak bargaining position, since they need insurance much more than the insurance companies need any one client (i.e. the demand curve for an individual's insurance is more inflexible than the supply curve); large employers would be in a stronger bargaining position, so the unemployed and employees of small businesses would be at a serious disadvantage.
I assume such a free-market reform would also include scrapping the EMTALA law, which (to oversimplify) forbids emergency rooms from turning people away for inability to pay, because it imposes a huge unfunded mandate on hospitals.
The question then is what happens to people with a combination of low income, pre-existing conditions that mean no insurance company is willing to sell them insurance that would actually help them at a price they're willing/able to pay. Some of them might get lucky and visit a hospital that chooses to do pro bono work (funded by philanthropists or religious institutions). The rest of the hardship cases, one supposes, would simply die and decrease the surplus population.
Again, not a recipe for winning votes.
Obama says he doesn't need Congress; he'll just use his executive powers to legislate!
I am a non-believer in insurance, and no free market in healthcare could carry a mandate to be insured, nor would a free market give tax favors for medical insurance but not for direct healthcare expenditures.
A decent healthcare system would:
1. Liberalize the insurance market and require actuarial soundness.
2. Eliminate tax-favors for insurance.
3. Allow any gummint healthcare dollars to be spent overseas.
4. Require MFN pricing for all healthcare patients, allowing discounts only for cash and other business reasons.
5. Require all providers to publish their healthcare prices by CPT or ICD-10 code.
Obamacare is something that will be here until Obama is gone, at the very least.
Incidentally, I agree with jimbino's recommendations, in particular
* all patients should pay the same price for the same procedure (no more insurers negotiating a price 5-10 times lower than an uninsured patient would be charged), and
* that price should be published so you can see it before going to the provider.
Those would be new government regulations, yes, but they're regulations directed at allowing a market to work better.
If the health insurance market is constrained by asymmetric information problem, then a mandate _is_ a free-market approach. It's a Coasean assignment of endowments, reflecting the fact that folks would rather be insured than not, even for things that might be regarded as preexisting conditions.
If you'd rather be uninsured, you could always sell your insurance position to a third party, or even sell it back to the insurance company. But you won't get much for it, because that party will naturally assume that you are healthy. (Hence very few people would be willing to do that, so a missing market here is not a huge violation of free-market principles.)
Strategically I think they should make Obama make a series of difficult vetos.
First step would be to repeal the individual and employer mandate
Then pass regulations that allow much cheaper limited catastrophic plans to get subsidies on the exchanges and use these as the benchmark for subsidies. This can be sold as making insurance cheaper.
These two steps essentially convert Obamacare into a high risk pool for sick and less well off.
The problem with proposing conservative alternatives to Obamacare is that Obamacare is basically what conservative think tanks have been proposing when they wanted to fend off something more radical. It's about as conservative as you can get given its objectives. So conservatives have to attack the objectives...or else hope it doesn't work. If it doesn't work, then repealing it won't be difficult.
I think the question I would want to ask, apropos of hudebnik's suggestions, is what currently prevents competition and open pricing among medical suppliers. In most other markets, price comparison is pretty simple. For obvious reasons, I would rather promote competition by removing regulations than by creating them.
David, free-market solutions would be:
1. Eliminate certification of all medical providers, as your father recommended.
2. Kill the tax-favoring of employer-provided health insurance, as well as tax-favoring of direct medical expenditures.
3. Remove any restrictions on spending Medicare or Medicaid dollars overseas.
4. Prohibit any "gag rules" and enforce other anti-trust rules.
5. Extend public-accommodations laws to force medical providers to take all patients on an MFN status, without discrimination, just as bars and Walmart are forced to do.
If a Republican becomes president, can he just stop enforcing Obamacare? You can't have a situation where only presidents of one party think they have an obligation to enforce laws they oppose.
what currently prevents competition and open pricing among medical suppliers[?] In most other markets, price comparison is pretty simple.
Good question. Off the top of my head, the health-care market differs from most others because the people who decide what you need are largely the same people who sell it to you. (The only other clear-cut example I can think of is auto-repair.)
And when you need something, you often need it fast, which makes comparison-shopping difficult. (In auto-repair, you can usually safely wait at least a day or two before deciding what service to buy from whom.)
And there's more social stigma against price-sensitivity in health care than in, say, groceries or auto-repair. ("How can you haggle over a few dollars more or less? This is about somebody's life!") And doctors and nurses are highly trained and high-status; it seems somehow disrespectful to try to negotiate their prices down, at least on an individual basis. And I don't want to seem disrespectful to somebody who's about to have my life in his/her hands.
There are probably also regulations that impede competition in the health-care market, and if so we should certainly discuss whether those regulations provide enough benefit to outweigh this cost.
Beliavsky:
If a Republican becomes president, can he just stop enforcing Obamacare?
The individual-mandate, yes. The rules on "pre-existing conditions," "young adults on their parents' policies," etc. would be harder to nullify, because individual customers would probably have legal standing (and motive) to sue insurers over them.
And of course if we have those rules without the individual mandate, the insurance industry will get upset and throw their lobbying muscle behind changing one or the other.
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