My suggestions for what to do next, were originally proposed in The Week last year.
It's by no means a complete program—it does not address for example the huge problem of the increased Medicaid burden on the states—but it's something Republicans could actually do right away, in ways that meet their commitments to their constituents, see for example point 3 about the individual mandate. Personally, I find the mandate acceptable, but Republican leaders probably can't avoid working around rank-and-file views that the mandate must go—especially if the Supreme Court decides that the mandate is constitutional, as I'm guessing it likely will:
1) Bring forward the waiver effectiveness date to Jan. 1, 2014. It's just crazily burdensome on states that first they must get the ACA system up and working, and only then be allowed to develop their own alternative. There should be Democratic votes in the Senate for this kind of federalism measure.
ADVERTISEMENT
2) Reform the way in which ACA is financed.
The ACA is (supposedly) paid for with new taxes on higher-income taxpayers, beginning Jan. 1, 2013.
Greg Sargent at The Washington Post has charted the distributive effect of the ACA tax increases.
For earners in the top 5 percent, the bite is real but small. For earners in the top 1 percent, the bite becomes noticeable.
If it turns out that the ACA's costs have been underestimated (a good guess), then the bite on upper-income earners will be even more severe.But financing a universal health care benefit with a narrowly targeted tax exacerbates all the perverse incentives in U.S. health care. The U.S. already spends too much: 17 percent of national income, as compared to only 13 percent for the second-biggest spender, Switzerland. Extending health care coverage at the expense of only a few will only intensify the system's pro-spending bias.
3) Replace the individual mandate with a refundable tax credit valid only for the purchase of health insurance. Politics is not an entirely rational business. True, the individual mandate originated as a conservative and Republican alternative to government-run single-payer health insurance. But that was then. Today, the mandate is reviled among conservatives as an outrageous violation of individual liberty. There's no arguing the point. A work-around on this issue has become an indispensable ideological requirement for Republicans.
4) Unleash the cost controllers. Contrary to widespread impression, Americans don't use more health care than other people. They are actually less likely to see a doctor in a year than Western Europeans. When they go to hospital, they don't stay longer. But every item they do use costs more than its European counterpart. America needs a green eyeshade party willing to do the disagreeable work of squeezing waste from the system.
And since, post-ACA, cutting waste creates opportunities to reduce taxes, the waste-squeezing job logically falls to Republicans.
Back in 2009-2010, there were opportunities to negotiate many of these changes with an administration and a Democratic Party desperately eager for Republican buy-in. Those opportunities were thrown away. Republicans should not repeat this mistake in 2013. A fight for total repeal will end in total defeat. It will leave the ACA intact, as is, to accrete interest group support until reform becomes all-but-impossible.
