About a month ago, Megan McArdle goes over the many problems with Obamacare and as usual, while I support the policy, I fear that too many of her critiques are spot on. While discussing possible solutions to those problems, she mentions two options:

“repeal and replace” (or at least gut renovate the system so that it functions as originally promised), or tweak regulations and hope that’s enough. From a policy perspective, “repeal and replace” obviously seems to be the way to go; no one really likes the kludged-together system created by the Patient Protection and Affordable Care Act, and either Republicans or Democrats could design something that worked more rationally. However desirable this might be from a policy perspective, though, it’s even less plausible than legislative tweaks politically. Undoing what was done in 2010 would involve either repealing things that people like — like the ban on lifetime caps, and exclusions for pre-existing conditions — or moving toward something people don’t like, such as heftier mandates or government providing health care directly.

That leaves us regulatory tweaking. The good news about this is that it’s largely invisible to voters, which lowers the political barriers to change. The bad news is that there’s only so much tweaking regulators can do within the law (or even by skating outside it). This is the easiest option, but it’s also the weakest, and the least likely to work. Nonetheless, that’s what we’re going to end up doing, no matter who gets elected president.

To riff a little off that first quoted paragraph, one thing that’s bothered me about the “repeal and replace” mantra is that while it’s at least plausible that a Republican Congress and a Republican president might “repeal” the law, I don’t see them following through with the “replacement.” Why not just “replace” it, a move that would effect the repeal they’re claiming to seek?

That’s not a jab against McArdle. Her article is mostly just an excuse for me to sound off on “repeal and replace.” But she does raise problems that those, like me, who support Obamacare need to find some kind of answer for.

Category: Espresso

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2 Responses to The replacements

  1. Murali says:

    Something along the lines of I told you so may be relevant here. Back when we were debating Obamacare at OT I distinctly remember saying that the incentives were screwed up. Any system which did not seriously tackle cost containment was going to implode and Obamacare just made an incipient problem worse.

    • Probably. But I wonder what type of tweaking could help. I’d prefer/accept some kind of graduated income tax to pay the shortfalls. But that won’t happen (probably), and it doesn’t address the issues of incentives you (and McArdle) mention.

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