The fate of Obamacare is dominating headlines, but far too much of the conversation has missed the big picture. The debate about healthcare ought to be centered upon an overarching vision for healthcare. In the case of Obamacare’s architects, that meant focusing first and foremost on expanding insurance coverage — namely through the government-run Medicaid program. Indeed, three-quarters of the people who gained coverage via Obamacare did so through Medicaid.
The authors of the recently-unveiled Senate Republican bill (and its close cousin that passed the House a few weeks ago), approach healthcare policy with an entirely different mentality. While the bill has its share of imperfections, it succeeds in setting forth a fundamental goal for healthcare — that people from all walks of life should be empowered to participate in private insurance markets.
That is why the legislation would ensure that individuals and families who could not otherwise afford care are in charge of making their own healthcare decisions and can choose their own insurance plan in the private marketplace. That is the critical difference between the Obamacare status quo and a new path forward offered in the congressional Republican plan and it’s the reason the bill ought to enjoy broad support from conservatives.
As its defenders routinely tout, Obamacare resulted in an increase in insurance coverage. But what they don’t say is that the vast majority of this coverage expansion happened via Medicaid.
This is a tremendous problem. As for virtually all products, private markets deliver higher quality, more consumer-oriented products at a lower cost than government-run programs. Medicaid, on the other hand, has not delivered on its fundamental objective. A 2013 study in the New England Journal of Medicine showed that Oregon’s Medicaid program yielded virtually no improvement in health outcomes for its participants relative to people who did not have any insurance. This should be a great cause for concern — especially considering that the program costs taxpayers well more than $500 billion dollars each year.
The Senate bill offers something significantly better, especially for those who obtained insurance due to Obamacare’s Medicaid expansion.
It would create a path to purchasing insurance in the private marketplace in the form of a refundable, advanceable tax credit. While similar to the House bill in many ways, the Senate bill’s tax credit represents a significant improvement over the House version. It contains greater age and means-testing provisions that will better enable people, particularly low-income elderly people, to obtain coverage. Helping people move out of Medicaid and into private insurance is something that should resonate powerfully with conservatives and libertarians as it will not only reduce costs to the government, but will also result in better health outcomes and more individual liberty.
Congress stands at a crossroads. If the Senate’s bill fails, the path forward will be an expansion of the vision set forth by Obamacare — a vision of maximizing insurance coverage via government programs. That means more states will expand their Medicaid programs and the federal government will increase payments to states and insurance companies to keep the failing Obamacare law afloat as long as possible.
It’s not a stretch to say that ultimately, keeping Obamacare on the books will take us to a single-payer healthcare system.
Conversely, enactment of the Senate GOP healthcare legislation embraces a vision that empowers individuals and families to make their own healthcare decisions. It will move individuals and families away from government programs and toward private markets. While it doesn’t achieve all the policy goals that the free market movement would like, it takes a huge step in the right direction and puts the nation on a path toward a market-based, consumer-oriented healthcare system.
Brandon Arnold (@BrandonNTU) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the executive vice president at the National Taxpayers Union.
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