Modern conservatism, at least in its pre-Donald Trump incarnation, evolved to believe in a marriage of Edmund Burke and Milton Friedman, in which the wisdom of tradition and the wisdom of free markets were complementary ideas. Both, in their different ways, delivered a kind of bottom-up democratic wisdom — the first through the cumulative experiments of the human past, the second through the contemporary experiments enabled by choice and competition.
In health care policy, however, conservatives tend to simply favor Friedman over Burke. That is, the right’s best health care minds believe that markets and competition can deliver lower costs and better care, and they believe it even though there is no clear example of a modern health care system built along the lines that they desire.
The dominant systems in the developed world, whether government-run or single-payer or Obamacare-esque, are generally statist to degrees that conservatives deplore. A few of them — notably Singapore’s, the beau ideal of right-wing health care wonks — do have distinctive elements that conservatives favor. But mostly they tend to be much more heavily regulated and subsidized than the system that conservative health policy wonks and policy-literate Republicans would like to see take over from Obamacare.
Which is not to say that the conservative health policy vision lacks empirical grounding. There is compelling evidence that markets in health care can do more to lower costs and prices than liberals allow, and good reasons to think that free-market competition produces more medical innovation than more socialized systems.
But still — there is no existing system on a national scale that looks like the health care system that Paul Ryan or Tom Price would design, no wisdom of developed-economy experience that proves that such a system would actually keep overall costs low and prevent too many people from being shut out of insurance markets. So embracing even the smartest conservative Obamacare alternative requires a not-precisely-Burkean leap of faith.
And this, in a nutshell, is why Republicans should give serious consideration to the proposal that Sen. Bill Cassidy of Louisiana and Sen. Susan Collins of Maine have just put forward as a possible health care reform alternative.
The essence of Cassidy-Collins, and the reason that many Republicans don’t like it, is that it isn’t actually a full Obamacare replacement. Instead, it’s a federalist compromise. It lets individual state governments decide whether they want to stick with Obamacare or not, which would mean that the law would remain intact in most blue states for the time being, while redder states would have the opportunity to turn roughly the same amount of money (95 percent) to a different end.
That end would look like one of the more plausible conservative alternatives to Obamacare: a subsidy to cover the cost of a catastrophic health insurance plan, plus a directly funded health savings account to cover primary care.
This system could be layered on top of the existing Medicaid expansion, replacing only the Obamacare subsidies and exchanges, or it could replace the Medicaid expansion as well, offering the poor and near poor the same “catastrophic insurance plus a subsidy” as everyone else in the individual market. Either way the individual mandate would disappear, but people would be auto-enrolled in a catastrophic plan (with the option to opt out), meaning that coverage would be nearly universal (thus fulfilling one of President Donald Trump’s various promises) even though its benefits would be less comprehensive than Obamacare’s.
Taken as a whole, this approach distills both the promise and the peril of conservative health care policy. The promise is that by having people pay for more of their health care in cash and by giving them more freedom in what plans they’re allowed to buy, you would end up with less spending, lower prices and less cost inflation. (And you wouldn’t need the heavy, innovation-squashing price controls that single-payer systems use to get there.)
The peril is that there would be too wide a gap between what the money in your health savings account covers and what you need before your catastrophic coverage kicks in. In which case many people with consistent health care costs for chronic problems would rack up impossible medical bills in short order.
Conservatives who want this model to replace Obamacare nationwide believe that the promise outweighs the risk — and this is, again, a reasonable belief. But it’s also a belief that hasn’t been tested on any kind of sweeping, economy-wide scale. And this is the advantage of Cassidy-Collins: It encourages governors and legislators to actually put the conservative theory of health care to the test without simply reversing the ideological colors of the great Obamacare experiment and immediately turning the entire U.S. health care system over to the right’s technocratic vision.
Of course this would mean that Obamacare’s existing problems would persist in the states where it continues. But those problems — the rise in premiums, the fleeing insurers, the risk of a death spiral downstream — are not equally problematic in every state, and they are not fiscally dangerous, as yet, on the scale that many conservatives initially feared.
As the conservative policy thinker Yuval Levin wrote late last year, the striking thing about Obamacare to date is how much smaller than expected its effect on the overall health care system has been. Fewer people are being insured on the exchanges than liberals hoped, fewer employers are dumping high-cost employees onto the exchanges than conservatives feared, and as a result, he writes:
“The extremely serious problems we are seeing now are within the one system that Obamacare created from scratch, the exchange system. That system may not survive, and its condition has a lot to teach us about the problems with liberal health economics. But it is a much smaller system than anyone thought it would be at this point, about half the size that CBO projected, so that the effects of any failure it suffers are likely to be more contained than anyone might have expected.”
This containment means that conservatives have room and time to be more patient, cautious and experimental than were the Obama Democrats before them. If the Obamacare exchanges aren’t ultimately going to work out, then allowing them to persist in liberal states while an alternative system gets set up in red states is a reasonable way to gradually transition from the liberal model toward the conservative one. If the right’s wonks are right about health policy, the Cassidy-Collins approach should — gradually — enable conservatives to prove it.
And if the right is wrong, if its model doesn’t match reality, if people are simply miserable as health care consumers because the system has too much of Friedman and not enough of Burke – well, in that case both the country and conservatism will be better off if we learn that via a voter rebellion in 10 right-leaning states, rather than through a much more widespread backlash against a nationwide health-insurance failure. (Which is something a president with a high self-regard and poor approval ratings might have a particular reason to avoid.)
Between this reasonable case and legislative reality, of course, falls a variety of shadows. But more than for the various repeal-and-replace alternatives? I’m not so sure.
Right now the Cassidy-Collins compromise has few enthusiastic backers. In a few months, however, it might turn into conservative health care reform’s best hope.