Frum on Obamacare

Conservative gadfly David Frum on the fixing the Affordable Care Act in The Atlantic.

The Republican presidential candidates have reacted to the latest court case by recommitting themselves to Obamacare repeal after a Republican victory in 2016. They are thereby transforming the coming election from a debate over the Obama record—and over the Hillary Clinton agenda—into a stark referendum on universal health coverage. They are inviting every voter to wonder:  “If I vote Republican, will I lose my health insurance?” For millions of people, the answer to that question will be: “Yes.”

There’s a great deal wrong with Obamacare. As Jed Graham details in his important, recently released e-book, Obamacare Is a Great Mess, the Affordable Care Act is riddled with clunky irrationalities. The law taxes and subsidizes in ways that don’t always make a lot of sense. It encourages businesses to employ low-wage workers less than 30 hours a week to avoid employer mandates. Subsidies fade in and out in ways that push economically marginal people into high-deductible bronze plans that leave them worse off than they were before. The tax penalty for individuals who don’t buy insurance is big enough to impose hardship, but not big enough to change behavior. And so on and on.

Yet it’s simultaneously true that the Affordable Care Act meets some real national needs. It did provide insurance to millions who lacked it. It did put an end to some outrageous practices by health insurers. It does seem to be slowing the growth of per-person healthcare costs. If it vanished tomorrow, potentially as many as 23 million people would lose their coverage: the 11.2 million added to the Medicaid program since 2010, the 10 million in the state and federal exchanges, and the 5.7 million young adults under age 26 enrolled in parental healthcare plans.

Aware of the power of the status quo, Republicans have promised not merely to repeal Obamacare but to “repeal and replace” it. But the party has never managed to coalesce around any replacement plan. The various ideas on offer remain stuck in the conceptual stage, vague about such important details as “how much would this cost,” “how many would be covered,” and “how will coverage be paid for.” What is clear, however, is that the Republican alternatives, such as they are, would remove coverage from many who have it now. In my opinion, that one fact is likely to cost Republicans the White House in 2016, no matter who they nominate.

Republicans should accept the Affordable Care Act as a permanent new fact of American society. They should accept universal healthcare coverage as a welcome aspect of any advanced democracy. Instead of fruitlessly seeking to repeal a law now that will in 2016 enter into its fourth year of operation, they should specify the law’s most obnoxious flaws and seek a mandate to reform them.

1) Fix the funding mechanism. ACA funding should be visible and broadly based. Universal health coverage benefits everybody; all should contribute toward its costs. I’ve long been attracted to directing the proceeds of a carbon tax to health coverage. The taxes on upper-income earners in the ACA was a political maneuver to round up Democratic votes in Congress after hopes of bipartisan agreement faded. One-party backing for a major social program is not sustainable over the long haul.

2) Let states run their Medicaid programs their way. The ACA allows the president to grant waivers to states to innovate and experiment. Those waivers should be extended broadly. As states pay for more of the Medicaid expansion, they should be allowed scope to make their own decisions.

3) End the employer mandate. The mandate has simply failed. End it. If an employer contribution to the ACA is desired, impose it through a broadband payroll tax, rather than a tax disguised as a counter-productive regulation.