When Obamacare fails: The playbook for market-based reform

Article Highlights

  • Constructing a playbook for market-based Obamacare reform.

    Tweet This

  • Defined-contribution payments would help fix programs like Medicare and Medicaid.

    Tweet This

  • The stakes around Obamacare couldn't be higher.

    Tweet This

Subscribe to AEI's Health emails.

When Obamacare fails: The playbook for market-based reform

Download PDF
Executive Summary

The Affordable Care Act (ACA) is too misguided to succeed, too dangerous to maintain, and far too flawed to fix piecemeal.

Repealing most, if not all, of the ACA is necessary to clear the way for the lasting health care reforms we need. Ending the acute pain caused by what is more commonly called “Obamacare” is the beginning, not the end, of providing a safe, effective, and more sustainable cure. To make this happen, we need a clearer vision for the policy changes necessary to fix our health care system and improve the health of Americans.

Although the Supreme Court narrowly upheld the main components of the ACA, including its individual mandate, last June, the law still may not be fully implemented. But it will not simply fall from its own dead weight and quietly leave the scene. Repealing as much of the ACA as possible remains a necessary part of fixing the fundamental ailments of our health care system that Obamacare has failed to solve, and in many ways has worsened.

However, offering only a simple return to the pre-ACA status quo would be a woefully inadequate and unappealing alternative. Americans need principled and effective solutions to the problems of high health care costs, inconsistent health care quality, and gaps in access to affordable care. A replacement plan that works and lasts should provide better rules, tools, and incentives to help patients, purchasers, and providers improve their health at costs they are willing and able to pay, within more secure but steadily improving arrangements.

The policy challenges for the post-Obamacare landscape include:

  • Retargeting taxpayer subsidies for health coverage;
  • Protecting vulnerable Americans;
  • Improving the performance of a consumer-based health system;
  • Making Medicare and Medicaid more accountable, effective, and sustainable; and
  • Managing the complex transition to a health system truly based on choice and competition.

This study aims to fill in the blanks for many ACA opponents who promise to replace it but do not take the next step: telling Americans how they would do so in a credible and convincing manner. The key policy prescriptions are neither unprecedented nor illusory. They reinforce the core principles and values held by a clear majority of Americans in their roles as voters, consumers, patients, and taxpayers.

A replacement and renewal program for better health care and health:

  • Starts with defined-contribution financing of all forms of taxpayer-subsidized health insurance coverage;
  • Retargets subsidies to strengthen the health care safety net for the most vulnerable Americans; 
  • Stimulates responsible competition among the states in information-based regulation of health insurance and health care delivery; and 
  • Builds better connections between more diverse coverage options and insurance consumers.

The many structural details, tradeoffs, and transition timetables in carrying out these objectives require careful attention, but the guiding principles must involve reliance on incentives, information, choices, competition, personal responsibility, and trust in individuals.

By redirecting personal health care decisions away from dysfunctional politics and back into the hands of patients and physicians, we can and we will do better. We can no longer afford not to change course, turn the policy page, and move ahead.

 

Chapter 1: Examining the stakes and prescribing a cure
Chapter 2: Rethinking subsidies for employer-sponsored insurance, Medicare, and Medicaid
Chapter 3: Extending portable protection against serious preexisting conditions
Chapter 4: A different approach to insurance regulation: Stronger incentives, enhanced information
Chapter 5: The bigger picture

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Thomas P.
Miller

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
    MON
  • 28
    TUE
  • 29
    WED
  • 30
    THU
  • 31
    FRI
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.