Was Obamacare truly evil, or just a missed opportunity?
By Scott Sumner
I was mildly opposed to Obamacare, but mostly because I thought it was a missed opportunity to reform health care. I was bemused to see very strident opposition to the program on the right, with some pretty hyperbolic language about socialized medicine and the end of freedom. (Language I don’t recall with Bush’s massive increase in government involvement in healthcare.)
In recent weeks I’ve seen a number of conservatives argue that the GOP would be making a mistake to simply repeal Obamacare. But why? If it’s such a horrible program, won’t Americans be much better off without it? So just repeal the program, and then later try to work on sensible reforms. That’s not my view, but it’s the view I’d expect from the people who told us that Obamacare was horrible.
One counterargument is that some people have grown to rely on Obamacare. But if that’s an argument against repeal, then it’s also an argument against any policy changes in any area of governance. All policy changes create winners and losers. Lots of people who made investment decisions based on the current tax code, will be hurt if the GOP lowers rates and closes loopholes. Should we not do tax reform? (See David Henderson’s excellent post discussing this issue.) At most, I would think you’d want to add a three-year grace period for those who were currently insured under Obamacare, to give them time to find suitable alternatives. But if the program is horrible, then get rid of it.
But those are not the arguments I’m seeing. A typical example was recently published in the National Review, a very conservative intellectual publication. The article suggests that Obamacare should be replaced with a new program . . . which sounds almost exactly like Obamacare! Now just to be clear, it’s not identical, but the similarities are so strong that it makes me wonder what all the fuss was about. Why did conservatives view Obamacare as a disaster, if they wish to replace it with such a similar program?
As I said, before the election I was to the left of the conservative movement, opposed to Obamacare but viewing some of the opposition as rather hysterical. Now I’ve shifted to a position to the right of the conservative movement, I favor radical changes in health care:
1. Elimination of all tax subsidies, such as the deductibility of health insurance costs.
2. Radical deregulation, including no barriers to market entry, no quality regulations, open borders for doctors, abolishing the FDA, no barriers on the type of insurance that can be offered.
3. Government healthcare would be provided at the lowest cost possible, even if it meant flying Medicaid patients to Thailand. (It probably would not after open borders for doctors, and no barriers to entry.)
I do favor some role for the government. One idea for overcoming the free rider problem is mandatory health saving accounts and catastrophic insurance. (The alternative is letting people who choose not to be insured simply die when they are sick. Even if that’s the right policy, society is not willing to adopt it—so health savings accounts seem like a good second best policy.)
In addition to health savings accounts and catastrophic insurance, there could be some sort of government subsidy for the needy. That might be government run clinics and hospitals, that offer bare bones service, as in Singapore, or subsidies for the purchase of HSAs and catastrophic insurance, for low income people. Singapore’s government spends only a tiny fraction of what our government spends on health care, but it has universal coverage and the world’s second longest life expectancy.
If people don’t like catastrophic insurance, they would be free to buy ordinary insurance, instead of HSAs. But there would be no government subsidy.
The GOP could do these radical changes,
which but they would be highly controversial. As a result, they’ll probably end up with something similar to Obamacare, but called Trumpcare.
PS. I’m still looking for answers to my questions on the proposed border adjustment tax.