The Conservative Case for ACA #Obamacare

It is for an odd reason buried beneath two and a half years of Republican political condemnations: the architecture of the Affordable Care Act is based on conservative, not liberal, ideas about individual responsibility and the power of market forces.

This fundamental ideological paradox, drowned out by partisan shouting since before the plan’s passage in 2010, explains why Obamacare has only lukewarm support from many liberals, who wanted a real, not imagined, “government takeover of health care.” It explains why Republicans have been unable since its passage to come up with anything better. And it explains why the law is nearly identical in design to the legislation Mr. Romney passed in Massachusetts while governor. 

The core drivers of the health care act are market principles formulated by conservative economists, designed to correct structural flaws in our health insurance system — principles originally embraced by Republicans as a market alternative to the Clinton plan in the early 1990s. The president’s program extends the current health care system — mostly employer-based coverage, administered by commercial health insurers, with care delivered by fee-for-service doctors and hospitals — by removing the biggest obstacles to that system’s functioning like a competitive marketplace. 

Chief among these obstacles are market limitations imposed by the problematic nature of health insurance, which requires that younger, healthier people subsidize older, sicker ones. Because such participation is often expensive and always voluntary, millions have simply opted out, a risky bet emboldened by the 24/7 presence of the heavily subsidized emergency room down the street. The health care law forcibly repatriates these gamblers, along with those who cannot afford to participate in a market that ultimately cross-subsidizes their medical misfortunes anyway, when they get sick and show up in that E.R. And it outlaws discrimination against those who want to participate but cannot because of their medical histories. 

Put aside the considerable legislative detritus of the act, and its aim is clear: to rationalize a dysfunctional health insurance marketplace. 

 

This explains why the health insurance industry has been quietly supporting the plan all along. It levels the playing field and expands the potential market by tens of millions of new customers.

The rationalization and extension of the current market is financed by the other linchpin of the law: the mandate that we all carry health insurance, an idea forged not by liberal social engineers at the Brookings Institution but by conservative economists at the Heritage Foundation. The individual mandate recognizes that millions of Americans who could buy health insurance choose not to, because it requires trading away today’s wants for tomorrow’s needs. The mandate is about personal responsibility — a hallmark of conservative thought. 

In the partisan war sparked by the 2008 election, Republicans conveniently forgot that this was something many of them had supported for years. The only thing wrong with the mandate? Mr. Obama also thought it was a good idea. 

The same goes for health insurance exchanges, another idea formulated by conservatives and supported by Republican governors and legislators across the country for years. An exchange is as pro-market a mechanism as they come: free up buyers and sellers, standardize the products, add pricing transparency, and watch what happens. Market Economics 101. 

In the shouting match over the health care law, most have somehow missed another of its obvious virtues: it enshrines accountability — yes, another conservative idea. Under today’s system, most health insurers (and providers) are accountable to the wrong people, often for the wrong reasons, with the needs of patients coming last. With the transparency, mobility and choice of the exchanges, businesses and individuals can decide for themselves which insurers (and, embedded in their networks, which providers) deserve their dollars. They can see, thanks to the often derided benefits standardization of the reform act, what they are actually buying. 

They can shop around. 

And businesses are free to decide that they are better off opting out, paying into funds that subsidize individuals’ coverage and letting their employees do their own shopping, with what is, in essence, their own compensation, relocated to the exchanges. 

Read Full Article: http://www.nytimes.com/2012/09/30/opinion/sunday/why-obamacare-is-a-conservatives-dream.html

J.D. Kleinke is a resident fellow at the American Enterprise Institute, a former health care executive and the author of the novel “Catching Babies.”

The Problem With the Republican Party

What the GOP Could Learn From Obamacare

The problem the Republican Party is facing right now is just like the one the architects of Obamacare once faced.

By Joe Onek|Posted Friday, Sept. 20, 2013, at 3:35 PM

Even though it may be suicidal for their party, congressional Republicans are threatening to shut down the government in order to defund Obamacare. They feel compelled to take this highly risky step because Republican primary voters are so conservative that any hint of moderation could be politically fatal.

Ironically, the problem now facing Republicans is similar to the one the architects of Obamacare faced several years ago. A central goal of Obamacare is to ensure that persons with pre-existing conditions are not denied access to affordable health insurance. But prohibiting the exclusion of persons with pre-existing conditions raises the specter of a health insurance death spiral.

Here’s the logic: If health insurance plans are required to enroll high-cost individuals, premiums will go up substantially. Healthier (and less costly) individuals will then leave the plans, while high-cost individuals, who may have no other option, remain. As a result, premiums will rise even higher and even more low-cost individuals will leave. Before long, the insurance plans will face bankruptcy.

The Republican Party faces a similar phenomenon.

In many regions, Republican primaries nominate far-right Senate and House candidates. These candidates, whether they win or lose, drive moderate voters to leave the Republican Party. Conservatives then dominate the party to an even greater extent and nominate even more extreme candidates, thus driving away more moderates. Bankruptcy follows in the form of lost elections.

Of course, in many states and House districts, Republicans are so dominant that they cannot lose no matter what candidate they put forward. But in the last two election cycles, Republicans lost Senate seats in Colorado, Delaware, Indiana, Missouri, and Nevada because of the ultraconservative candidates they nominated. They may have lost a seat in Maine because of the threat that a fringe conservative could successfully challenge Sen. Olympia Snowe. And they lost several House seats in 2012 because of the extreme candidates nominated and elected in 2010.  Furthermore, Mitt Romney’s campaign was hurt by the positions he felt compelled to take, especially on immigration, in the presidential primaries, and the current antics of congressional Republicans may damage any future GOP nominee in 2016.

How does the Republican Party counter its death-spiral problem?

Earlier this year Karl Rove proposed using the financial clout of wealthy mainstream Republicans to prevent the nomination of extreme candidates. But this is unlikely to work, in part because the party’s far-right wing has plenty of its own rich backers.

The best solution for Republicans may be found in Obamacare.

Obamacare abolishes pre-existing-condition exclusions and requires health plans to enroll high-cost  individuals. But it seeks to ensure that health plans have a broader subscriber base than just those who are expensive to insure. It imposes a mandate and provides generous income-based subsidies in order to induce healthier individuals to join the plans, too.

The Republican Party could take an analogous approach.

It could broaden its primary voter base by opening its primaries to independent voters or, at least, to those independent voters who have registered as Republicans at some point during the last two decades. By becoming more inclusive, it would become more competitive.

The present Republican state party leaders aren’t likely to embrace this approach. But if Republicans continue to lose key elections, some leaders will begin a campaign to get moderately conservative independent voters to register as Republicans to take back the party. It will be a long slog; change is hard. Why do you think it has taken so long to provide health insurance for all Americans?

Read More From Slate.com: http://www.slate.com/articles/news_and_politics/politics/2013/09/republican_party_s_obamacare_crisis_the_logic_of_the_president_s_health.html