Later this week the House Republicans are expected to vote on one of the most historic pieces of legislation in recent times: the rollback of ObamaCare.
While there is much internal party fighting about the details of that bill, Republicans – especially conservatives – should not lose sight of the very high stakes here and the magic of this moment.
Ideally, ObamaCare repeal should include the following provisions, most of which are in the House bill:
1) Repeal of all the insurance mandates.
2) Repeal the “essential benefits” package for insurance policies.
3) Repeal of the tax increases on investment income, medical devices, and drug companies that have reduced business investment and medical innovation.
4) Repeal of employer mandates including the so-called “50 worker rule,” and the “30 hour a week rule,” that have hurt job and wage growth.
We are on the cusp of one of the sweetest victories for free market conservatives in many years. It will be one of the few times in history that a federal entitlement program has been repealed. Government will be rolled back. And government spending will be lowered by hundreds of billions of dollars. That’s an astonishing achievement.
In addition to rolling back the federal entitlement aspects of ObamaCare just think of what will happen to the economy, jobs, output and productivity by eliminating the taxes embedded in ObamaCare. The economy will be jump started. Why just eliminating the 3.8% tax add-on to income will add some 1000 to 1500 points on the Dow Jones Industrial Average and thereby reduce the unfunded liabilities of virtually every pension fund in the United States.
Eliminating the other taxes in ObamaCare and the anti-growth regulations will have equally as great an impact on growth. What’s not to love?
The House bill is far from perfect, but life is a marathon not a sprint and this is the first of hopefully many bills to fix our broken insurance markets. And we are mighty appreciative that stalwarts like Senators Rand Paul, Mike Lee, Ted Cruz and the House Freedom Caucus members are hard at work as we write trying to improve the bill as much as possible. The Heritage Foundation and Freedom Works have made very constructive suggestions to make big improvements and we hope Congress and the administration are listening.
But the big prize – and what voters empowered the Republicans to do – was to fulfill their promise that they would repeal a law that has had catastrophic consequences. ObamaCare has been the single biggest expansion in government in 30 years.
The federal government is what has created the stampede of medical costs in the first place. We share the desire of free market advocates to transform the health insurance system into a genuine free market-oriented marketplace. Controlling costs is not complicated. It requires more competition among health care providers, expanded individual choices, encouraging innovation in life saving drugs, vaccines and treatments and constructing a true medical care market. ObamaCare has sent the health insurance market into a death spiral of rising costs and fewer healthy people signing up for coverage. The costs are exploding for the government and families, the amount of insurance competition keeps falling, and the taxes are choking growth in the economy.
Virtually every promise that Democrats made about ObamaCare has been shown to be untrue. This law cannot stand and liberals who defend it have no leg to stand on.
We worry that as they debate the exact particulars of the “replacement” bill, they lose sight of the overriding goal of sticking a stake through the heart of ObamaCare. Failure to do so will have very negative consequences for the GOP.
Remember Milton Friedman’s admonition which is so apropos today – Never let the best be the enemy of the good.
The repeal initiative is off to a good start by expanding Medical Savings Accounts and repealing meddlesome insurance market regulations and mandates. These are highly constructive measures to slow health care inflation and deliver patient-oriented care. Eventually congress should also eliminate the trial lawyer tax on our health care bills by enacting common sense medical malpractice reforms.
The argument that Americans will lose their insurance under the Republican alternative needs to be put to rest as well. The one absolute certainty is that left to its own devices, ObamaCare will decimate the insurance market and tens of millions of Americans will lose their coverage. With insurance premiums doubling in a single year in some states, the Affordable Care Act is truly the Unaffordable Care Act and Americans know it every time they get their insurance bill.
One final point: because ObamaCare is melting down much faster than anyone anticipated, America has finally arrived at a health care cross roads. We either are going to have a government-run system, which is what Obama and Congressional Democrats wanted all along, or we will use the power of markets and competition to lower costs and liberate the economy.
Forbes, Kudlow, Laffer, and Moore are the founders of the Committee to Unleash Prosperity.