When Obamacare fails

The playbook for market-based reform

Amid a protracted rollout, the real-world evidence keeps mounting: the Affordable Care Act (Obamacare) is too costly to finance, too difficult to administer, too burdensome on doctors, and too disruptive of health care arrangements that Americans prefer. The need to replace it has never been stronger, yet full repeal is unviable in the short-term. The long-term task for reformers is to lay out a convincing case, not for a return to the former status quo, but for the kind of patient-centered health care system only a market-based model can deliver. But what policy changes would that entail? And what would they mean for patients and providers? American Enterprise Institute resident fellow Tom Miller answers these and other questions:

Whats at stake?
A lot more than a policy debate. The course we set will profoundly affect the health of all Americans, the growth of our economy, and the relationship between citizens and their government.

Why is Obamacare the wrong path for America?

Because it shifts health-care decisions from patients and physicians to politicians and bureaucrats.

What would market-based reform mean for patients and doctors?

It would mean health priorities would be set through individual doctor-patient relationships, not one-size-fits-all welfarestate mandates. It would mean giving up the false promise of guarantees in favor of substantial real-world improvements in cost, value, access, quality, and care. Patients would enjoy greater choice and access to health resources, while doctors unburdened by excessive regulation could devote more of their practice to providing health care, not reporting to bureaucrats.

What are the key principles of market-based reform?

1) Retarget taxpayer subsidies for health care coverage: Current open-ended subsidies for private health insurance, Medicare, and Medicaid cost too much, distort health care decisions, and hide the real prices we pay, rewarding volume instead of value and quality. By converting our public financing from a defined benefit to a defined contribution model, we can control costs, trim waste, and put patients first. 2) Protect vulnerable Americans: The current health care safety net is overstretched and underfunded. We must restructure it to better protect Americans who face preexisting conditions or sudden misfortune. This change should encourage smarter health care decisions instead of subsidizing poor health habits. 3) Improve the performance of a consumer-based health system: Government officials should suggest and inform, rather than dictate, what constitutes the best or better health care. This involves opening doors to market-driven choices, not restricting access to only politically-favored types of coverage. 4) Reform Medicare and Medicaid to become more accountable, effective, and sustainable: Reforming these two dominant health coverage programs is more than just a budgetary exercise. The health of our health care system depends on ending their trillions of dollars in unfunded liabilities, quality-blind care, arbitrary price-fixing, intergenerational inequity, and broken promises. 5) Evolve employer-based coverage: Americans deserve an insurance market with far greater choice, competition, assurance, and mobility than the traditional employer-based model provides. The days of tax and regulatory policies that disproportionately favor traditional employer coverage are numbered. Read the full report: http://www.aei.org/papers/health/healthcare-reform/ppaca/when-obamacare-fails-theplaybook-for-market-based-reform/