Earlier this month, the United
States Congress passed and President Barack Obama signed into law a measure to
repeal a provision of the law that federalized health insurance, “Obamacare.” The provision would have prohibited small
businesses from offering certain high deductible health insurance plans to
their employees.
By
repealing the provision, small businesses may continue to offer such plans,
which make their employees eligible to open health savings accounts
(HSAs). HSAs, which were signed into law
by President George W. Bush, are tax-exempt accounts that earn tax-deferred
interest. Contributions to them may be
carried over if not spent and are heritable.
Thus, they help reduce unnecessary health care spending by incentivizing
saving. By offering such plans,
employees may exercise their freedom of choice to pay lower premiums in
exchange for the higher deductibles, a choice which especially makes economic
sense for younger workers without families.
Additionally, contributions to HSAs represent tax cuts, which lead to
even more freedom, as people who contribute to them are freer to spend health
care money as they see fit.
As I posted last month, this bill
is the third repeal of a part of Obamacare that has been approved by both the
Republican-led House of Representatives and the Democratic-led Senate and
signed into law by President Obama, in addition to a major provision that was
struck down as unconstitutional by the Supreme Court. I share the concern of some fellow
conservatives that reforms of a bad program make it more difficult to repeal
that program fully, but Obamacare is sufficiently disastrous that these minor
fixes do not prevent it from being undermined by its own provisions.
In the case of welfare reform,
conservatives were right to reform it – without compromising on principles – to
prove that work is better than welfare, which produced spectacularly successful
results of increasing employment and decreasing the deficit. Similarly, in the case of Obamacare,
conservatives were right both in terms of politics and policy to work to repeal
minor provisions. Politically, these
efforts provide refutation to the liberal Democratic argument that
conservatives and Republicans are focused only on repeal because of partisanship
or by being too steadfast to ideological conviction to relieve people of
unnecessary burdens, while having the additional benefit of further documenting
how flawed the law to federalize health insurance has been. Also, getting the liberal Democrats to go
along with salvaging a Bush-era reform – without having to give up anything in
return – is a noteworthy political accomplishment. In terms of policy, the repeal of this
particular provision increases freedom and reduces taxes, which advances
conservative principles and represents good government.
Conservatives should continue to
work to repeal the federalization of health insurance totally, but should not
pass up opportunities in the meantime to repeal some of its more onerous
provisions, either through legislation or the courts, as long as these efforts
are in keeping with conservative principles and do not strengthen Obamacare
structurally in such a way as to make it more tolerable by the public. When conservatives do, they ought to claim the
credit they deserve.