Conservative Republicans Get Liberal Democrats to Increase Freedom and Cut Taxes in Repealing Part of Obamacare

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.