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Putting Obamacare Out of Its Misery

Trump’s health care opportunity.

By Michael Astrue • Weekly Standard

Discontent with Obamacare—and with the delivery of health care more broadly—unites most Americans across our other divisions. That discontent creates enormous opportunities and risks for our president-elect.

The new administration would be misguided to start a typical Washington process that brings the usual suspects to town for dull sessions that grind out pablum that no one will digest. On the other hand, they will not inherit a detailed roadmap from congressional Republicans and should not expect that any Health and Human Services (HHS) transition team, no matter how talented and focused, can quickly create a workable plan in isolation.

History provides useful lessons in how to proceed. Donald Trump’s opponent in this election created a dreadful first impression with the American people in 1993 by overseeing a justly derided process for reforming health care—a Byzantine cabal, working in secret, that contributed to the collapse of her initiative. Almost two decades later, President Barack Obama repeated Hillary Clinton’s mistake, jamming a flawed bill through Congress in the least transparent and most partisan way. It was without parallel in any major domestic reform in American history. Resentment over having “to pass the bill [to] find out what’s in it” ignited seven years of partisan bitterness in Congress and, more broadly, increased the contempt for Congress that helped to fuel Trump’s historic upset.

The president-elect should begin by following through on a proposal that he embraced in the closing months of the campaign: interstate sale of health care insurance. Letting the market work without the barriers to entry that limit competition should be much easier to legislate than other mind-bendingly difficult details of health care regulation.

Sooner than that—the sooner the better—he might want to schedule a one-day meeting with governors and insurance company chief executive officers (with absolutely no substitutions of more junior people). That meeting should begin with a firm declaration by our president-elect that interstate sale of health insurance is going to happen and that the only purpose of the meeting is to determine the authorities that the states will retain. This meeting should have the transparency that President Obama promised, but did not deliver, for the drafting of Obamacare—the discussion should be open to the media.

After his opening charge, he could leave the group with a representative (perhaps former Utah governor and HHS secretary Michael Leavitt) to define principles for which there is a substantial consensus. Acceptable principles should then be forwarded to Congress for incorporation into its Obamacare repeal legislation.

This starting point should be an easy win and would have the benefit of focusing attention on the need to restructure Obamacare’s “health exchanges.” It would of course be easy for Congress to eliminate them—the IT systems were failures riddled with corruption that the highly partisan Justice Department failed to pursue with any vigor. Moreover, the exchanges are limiting consumer choice and driving up the insurance costs of lower-income workers at a disturbing rate.

Despite these issues, the best answer may be to leave the basic infrastructure in place and make the exchanges fully voluntary. States should only have to meet minimal federal standards for their exchanges and should have the discretion to devise innovative approaches for the needs of their own citizens.

Why preserve even this much? Because the new administration will not readily find a more efficient tool than the exchanges for continuing one of the few successes of Obamacare: its mechanism for purchasing individual and family insurance for people who do not have coverage through an employer. Such a mechanism becomes more important if you want to encourage competition, by letting insurance companies sell policies across state lines; without a centralized portal new entrants are likely to be overlooked.