The Republican Alternative to Obamacare

The Republican Alternative to Obamacare
January 29, 2014

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)
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The latest post-Obamacare reform proposal, put forward this weej by Senators Tom Coburn, Richard Burr, and Orrin Hatch, is likely to become the Obamacare alternative from the perspective of Republican Senate candidates and the like. It’s also the most realistic and centrist proposal we’ve seen yet in the post-Obamacare era, modest and moderate to the degree that I would not have been surprised, absent Obamacare’s existence, to see a few centrist Democrats to support it.

It should be viewed, therefore, as not a free-market ideal by any measure, but as a positive step in the right direction and a realistic approach designed to transition away from Obamacare and into a more market- and patient-friendly direction.

Here’s Philip Klein on the replacement:

On the one hand, they wanted to provide some sort of assistance to many of those who are benefiting now that Obamacare is in place. But, on the other hand, considering the backlash against the sweeping nature of Obamacare in general and Obama’s specific broken promise that Americans could keep their health plans if they liked them, the proposal isn’t as bold and disruptive (in a free market direction) as it may have been in a pre-Obamacare world.

John Davidson critiques the plan at The Federalist today.

Indeed, much of the Coburn-Burr-Hatch proposal seems to be as much a reaction to the new reality of ObamaCare as it is an effort to correct the failures of our pre-ObamaCare system. In doing so, it makes concessions to the various assumptions behind the ACA: tax credits for the purchase of individual coverage should be means-tested, preference for employer-sponsored coverage should be preserved, and states should automatically enroll those who don’t sign up in the interests of “universal coverage.” (This last provision comes with the big-government concession that if they so choose, individuals can “affirmatively opt-out” of coverage they were forcibly enrolled in.)

This approach waters down the free-market elements of the proposal, which would nevertheless go a long way toward making insurance more affordable--even if they are weaker than previous conservative proposals for the sake of being less disruptive. By deregulating the exchanges, for example, individuals receiving tax credits under the Coburn-Burr-Hatch plan could make their health care dollars go much further--especially the young and healthy, who would likely choose the kind of low-cost, high-deductible plans ObamaCare has regulated out of existence.

Likewise, if Medicaid were converted into block grant or capped allotment funding, and control given to the states, some Republican governors might be open to the idea of expanded eligibility, albeit with different criteria than originally called for in the ACA. The Coburn-Burr-Hatch plan, in fact, would allocate funds to states based on the number of people below 100 percent of the federal poverty level, which would amount to a sizeable expansion of Medicaid in many states--but on much more favorable terms.

For more on the legislative proposal, you can read a column from Coburn, Burr, and Hatch here. Here’s the response from Avik Roy, who says it’s the most credible plan yet. Yuval Levin likes it. From the left, we haveDonald Taylor’s reaction. And the Washington Post’s Sarah Kliff says people won’t love it like they love Obamacare. Patrick Brennan has more on the details.

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)