The ‘Repeal and Replace’ debate is all about choice

To understand Democrats’ and Republicans’ conflicting visions of healthcare reform, look no further than Obamacare’s “Essential Health Benefits” rule. This provision is a clear example of the kind of top-down federal control that has led to so many of Obamacare’s worst consequences.

According to the health law, all plans sold on the Obamacare exchanges must offer a list of supposedly “essential” benefits, whether patients require these benefits or not. These benefits include pediatric dental care and speech therapy.

The assumption behind these essential benefits is that the federal government understands the health needs of individual patients better than the patients themselves. In effect, these mandatory benefits have made low-cost policies a thing of the past. In fact, the Congressional Budget Office estimates that these required benefits, along with two other health-law regulations, drive up the cost of coverage by up to 30 percent.

In Arizona, the cost of a benchmark exchange plan is estimated to have increased by an average of 116 percent this year. That means that a young, healthy 27-year-old who paid $196 a month without subsidies in 2016 would end up paying more than $400 in 2017 for exactly the same insurance plan. Before Obamacare’s insurance regulations took effect, a 30-year-old man in Arizona could get covered for as little as $456 a year.

As it turns out, Americans aren’t eager to purchase expensive health plans stuffed with benefits they don’t need. Enrollment on the Obamacare exchanges in 2017 actually declined compared to the previous year.

Republicans’ healthcare vision, on the other hand, aims to foster a free, vibrant market where a wide variety of coverage options are on offer. Consumers would receive federal subsidies in the form of age-based refundable tax credits to help buy coverage. They would be free to choose the insurance that’s best for them at a price they can afford.

This approach relies on the same market principles that have improved quality and driven down prices elsewhere in the economy. It’s precisely what’s needed to clean up the mess created by Obamacare’s top-down insurance regulations.

Originally published in the Washington Examiner.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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