Insuring Everyone Should Be a Republican Goal

How can this be achieved? A single-payer, "Medicare for all" system won't do it: It would reduce the quality of medical care, limit access to care, and stifle innovation, productivity, and medical and technological progress. A straight repeal of the ACA — or repeal-and-delay — would be terrible, leaving millions more without coverage. An effective plan will need subsidies generous enough for low-income Americans to purchase insurance, market discipline to control the cost of health care and to encourage innovation and productivity, expanded choice for consumers, and strong incentives for young, healthy individuals to purchase insurance coverage.

Let me sketch some ideas that would advance these goals. Taxing employer-provided health insurance would (among other good things) reduce health care costs and create a pool of money to fund subsidies, in the form of refundable tax credits, available to low-income Americans for the purchase of health insurance. Deregulating the individual market for health insurance — allowing insurance companies to offer plans that cover only catastrophic medical events, not routine medical care — would make insurance more affordable and expand consumer choice. Funding high-risk pools would provide access to medical care for people with pre-existing medical conditions who might otherwise struggle to get insured in a deregulated market.

Under this framework, there would be a strong incentive to purchase health insurance even without the ACA's individual mandate: Catastrophic coverage would be less expensive, both to the government and to the consumer, than comprehensive coverage. A sufficiently generous tax credit would provide added motivation, as only those who actually purchased insurance would be able to claim it.

But conservatives should warm to other measures to encourage individuals to purchase health insurance. (Especially given the Congressional Budget Office's unshakeable faith in the power of the ACA's individual mandate.) For example, automatically enrolling Americans who are eligible for tax credits into health insurance plans, with the option to opt-out — as described by my AEI colleague James Capretta — should be strongly considered in GOP health reform efforts.

Republicans can't just let the individual health insurance market deteriorate. That would be wildly irresponsible — and politically infeasible. Instead, Republicans in Congress and conservatives more broadly need to offer a positive alternative to the ACA. Universal coverage — reached through market discipline, expanded choice, and assistance for those who need it — is the right goal to get them there.

— Check out President Romney's Cabinet: Who Would He Choose? on ThinkAdvisor.