January 24, 2015


End Obamacare, and people could die. That's okay. (Michael R. Strain January 23, 2015, Washington Post)

Among the many needed reforms to our health-care system, one should be that we move closer to universal insurance coverage -- on this point, the president is correct. But what should universal coverage look like? It requires a nuanced answer.

The insurance system should be designed to financially protect people from low-probability events, rather than provide comprehensive coverage for all health events, as Obamacare envisions. People should be free to pay for whatever care they like, but the government should not take money out of their paychecks to subsidize small-scale events that will happen with near-certainty (such as my annual sinus infection) or truly elective procedures (some states choose to cover acupuncture and most cover chiropractic care under their interpretations of the law). Instead, universal coverage should concern itself with the catastrophic expenses associated with serious medical events that will affect a minority of the population. People who can afford such coverage should be incentivized to purchase it, and those who can't should receive a government subsidy to do so.

Such a plan would lower premiums and offer more choice than Obamacare. It would require less spending, fewer tax dollars, less coercion and less regulation, leaving more money for other important government programs or for taxpayers to spend as they wish. A few conservative plans along these lines already exist, and not just among economists and think tank scholars. GOP Sens. Richard Burr (N.C.) and Orrin Hatch (Utah), along with former senator Tom Coburn (R-Okla.), have a well-developed, well-known proposal, the thrust of which has growing support among many conservative intellectuals and members of Congress.

The Burr-Coburn-Hatch plan would repeal the Affordable Care Act, including the individual mandate to purchase insurance, and leave the current system of employer-sponsored coverage largely in place. It would cap the tax preference for employer-provided coverage (though only for extremely generous plans) and use the revenue to provide a tax credit for people who don't get their health insurance through their jobs. [...]

Repealing Obamacare and replacing it along these lines may result in more people dying -- or fewer. That's a pretty tough forecast to make. But as with speed limits, gun laws, agency regulations and many other policies, including Obamacare, the shape of future health-care policy will require trade-offs. There are only so many resources, so choices between directing them to health care and allowing them to flow to other uses are inevitable. (Thankfully, such choices are both reversible and adjustable.)

If Obamacare perishes -- and I hope it does -- conservatives should be ready to coalesce around a concrete replacement plan, like I've described here. And liberals should be ready to debate them, knowing all the while that they, too, are advocating policies that will fail to save some of the sick and injured from the fate that ultimately awaits us all.

We all know where we're headed : a mandate for those who can afford their own catastrophic plan and HSA (with a simple model plan available to all Americans); subsidies for those who can't; taxes on plans that provide more comprehensive coverage (because they drive costs); and means-testing for Medicare.

Posted by at January 24, 2015 8:01 AM

blog comments powered by Disqus