Paul Ryan: the Optimist's Guide to Repealing Obamacare
Mr. Ryan's larger contribution in the Hoover speech was to highlight the problems in today's employer-sponsored insurance market, which can't be solved through, say, tort reform alone—or even by repealing ObamaCare alone.
This reality was underscored by yesterday's Kaiser Family Foundation survey that found employer-sponsored premiums have jumped 9% for families and 8% for individuals since 2010, when the growth rate was about 3% over 2009. Much of this surge is due to ObamaCare's new coverage mandates, and in anticipation of insurers becoming public utilities with government imposing price controls on rates. But it also shows that health care exists in a different economic universe than other businesses, even amid the current stagnation, due in large part to the tax subsidies for third-party payers that don't exist for individuals who buy insurance.
Mr. Ryan's plan goes to the heart of this dysfunction by proposing a refundable tax credit for any insurance policy, allowing workers to shop outside of the company store without penalties if they prefer. As tax policy we'd prefer an individual tax deduction rather than a tax credit. But a tax credit might be easier to sell politically, and the key point is to change the incentives so the market for individual insurance policies will rebound and provide more options and competition
If we engage the nation in a serious debate, and put forward a principled reform agenda, then I think the odds are good that the Republican party will soon find itself with the opportunity to do just that.
But we cannot stop at repeal. We also have a responsibility to fix the broken network of government policies that have made such a mess of health care in America.
If that is a prospect that excites you, it should. We have the right ideas on health care, and a change of power in Washington would bring with it an opportunity to turn these ideas into good public policy.
But if that prospect worries you… well, I can understand why. The political hurdles that stand in the way of real, structural health-care reform are daunting. And while Republicans have advanced many good ideas on health care, it is my candid opinion that the party as a whole has yet to coalesce around a complete reform agenda aimed at dealing with the underlying problem – which is runaway inflation in the cost of health care.
Today, I will attempt to make the case for optimism. Specifically, I come bearing three pieces of good news.
The first piece of good news is this: The urgent need to repeal and replace the President’s health-care law, coupled with the urgent need to deal with the drivers of our debt, will present us with an unavoidable time for choosing, allowing us to confront health-care inflation head-on.
The second piece of good news is this: Thanks to the tireless work of health-policy scholars here at Hoover and elsewhere, we know what works and what doesn’t. Simply put, badly designed government policies are to blame for much of what is wrong with health care today, and the solution is clear: We need to transition from the open-ended, defined-benefit approach of the past… to market-oriented, defined-contribution reforms that promote choice and competition.
And the third piece of good news is this: Though the political hurdles are high, we know we can win these fights – within the conservative movement, across party lines, and across the nation. The challenge will be to summon the courage and the ability to offer Americans a true choice of two futures on health care, which is a choice they deserve.