The impact of ObamaCare on doctors and patients, companies inside and outside the health sector, and American workers and taxpayers

The leading candidates for the Republican nomination are all proposing to repeal ObamaCare. The difference between them is what they would replace it with.

Businessman Donald Trump and U.S. Sen. Ted Cruz of Texas both have said they want to increase competition to allow Americans to purchase insurance across state lines, but neither has offered a detailed plan for replacing President Obama’s signature law.

Jeb Bush and U.S. Sen. Marco Rubio of Florida would provide tax credits to help Americans purchase individual health insurance policies and give states more control of their insurance markets.

Meanwhile, Ohio Gov. John Kasich says the focus should be on improving primary care and rewarding providers that generate better health outcomes and help to hold down costs.

Whoever is nominated will have a chance to bring about a fundamental shift in health care policy.

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It is common sense that people take care of their own property better than community property, often times referred to as “commons.” Because community resources are finite (say, grazing land in a pastoral society), overgrazing (and too little maintenance) is bound to occur absent any collaborative agreements. Moreover, one person’s conservation efforts cannot overcome all the other self-interested parties’ perverse incentives. Economists call this the tragedy of the commons. Unfortunately, ObamaCare proponents (and LBJ for that matter) did not understand how the tragedy of the commons would boost health care spending. Medicare, Medicaid and Obamacare plans are all examples of attempts by government to expand the health care commons — rather than encourage individuals to sustainably manage their own health care resources with appropriate incentives.

 

Scalia exposed that in King v Burwell, the Court elevated politics over both the rule of law and the separation of powers.

In King, a six-justice majority of the Supreme Court acknowledged the operative statutory text authorizes those taxes and subsidies only in states that establish an Exchange. But because the majority determined ObamaCare would collapse without them, it ruled the IRS could continue to implement those taxes and subsidies. Scalia’s dissent exposed that, rather than give effect to Congress’ intent, the majority simply substituted its own policy preferences for those of the legislature.

Both cybersecurity and customer service at the Internal Revenue Service have suffered because of ObamaCare, the agency’s head said in remarks to Congress on Thursday.

“Congress, as I noted in my testimony, has underfunded … the Affordable Care Act,” IRS Commissioner John Koskinen told a panel of the House Appropriations Committee.

Koskinen delivered his remarks in response to a question from Chairman Rep. Hal Rogers who pointed out that Congress had “increased funding specifically for taxpayer services” in 2014 and 2016.

Koskinen said it didn’t matter where Congress intended the money to go, explaining the agency had pulled funding for customer service and cybersecurity in order to ensure compliance with the ACA.

Democratic candidate Bernie Sanders recently released his health-care plan: a government-run single-payer system for the U.S., similar to what many European countries have. Criticism of the plan has so far focused on its lack of political feasibility, but there is an even more important reason to be wary: Accounting for costs and tax increases, it would reduce labor supply by 11.6 million. In a struggling economy, with tepid wage growth, hurting employment should be the last thing on any politician’s agenda.

The plan truly promises everything under the sun. Not only will everyone be able to get any medical treatment needed — with no cost at the point of service — but the plan won’t require a terribly high tax increase.

The growing number of ObamaCare failures creates an opportunity for conservatives to make a persuasive case for a replacement, experts said at a policy briefing held by the Conservative Reform Network and the Hoover Institution in Washington, D.C., on Wednesday.

“On healthcare, we too often hear that people on our side, that conservatives don’t have a plan,” said Grace-Marie Turner, president of the Galen Institute. “Conservatives overwhelmingly agree on principals and pillars for reform and for a replace[ment] plan.”

For all the damage that ObamaCare has done, it has also led to an awakening among Americans about the inadequacies and costs of a government-centered health care system. This awakening has created an enormous opportunity for conservatives. But making the most of that opportunity will require being clear about what is wrong with ObamaCare, why it needs to be replaced, and what a replacement must involve.

People are starting to get excited about another ObamaCare work-around: The section 1332 waiver. This refers to a section of ObamaCare that allows states great flexibility in how they deliver ObamaCare within their borders. The curious thing about section 1332 waivers is that they can only be issued as of January 1, 2017.

Why? Why not allow states to get section 1332 waivers as of October 2010, when ObamaCare’s first regulations took effect? Or January 2014, when the gushers of tax credits began to flow through the exchanges? Who knows? Maybe the administration just thought they needed a few years for the cement around ObamaCare to solidify.

Newt Gingrich and Tom Daschle have co-authored a report on how states can use section 1332 waivers to execute policy preferences either to the left or the right of ObamaCare. Anne Phelps of Deloitte & Touche LLP has also written a report describing the benefits of using a section 1332 waiver.

Unfortunately, while many 2016 presidential candidates have backed the “repeal” part of the “repeal and replace” equation, few have addressed how they would start over.

They would do well to follow the advice of The Heritage Foundation. The think tank’s soon-to-be-released policy handbook for candidates, Solutions 2016, lays out the “then what” reforms candidates should be talking about:

  • Remove regulatory and policy obstacles that discourage choice and competition.
  • Encourage personal ownership of health care by reforming the tax treatment of health care.
  • Transform health care coverage for low-income Americans by reforming Medicaid as a true safety net and glide path out of poverty.
  • Modernize Medicare program to meet the demographic, fiscal, and structural challenges that threaten to bankrupt the system.

Last month, majorities in Congress voted to repeal the Affordable Care Act. Not surprisingly, President Obama vetoed the repeal bill, and the Republican Congress was unable to override the president’s veto.

As former leaders in Congress, we have a message for both sides in this debate: It’s time to give the states a chance.

This doesn’t mean that conservatives and Republicans have to give up the fight to reduce the regulations and taxes in the law. It also doesn’t mean that progressives and Democrats have to stop defending protections for the underinsured and uninsured.

Instead, it’s time to look to a provision of the Affordable Care Act — Section 1332 — that can achieve what both sides earnestly wish for: providing more Americans with access to more affordable, flexible, patient-centered health care.