The release of the House Republicans’ health care reform plan is the latest reminder that misguided objectives drive many policy decisions in Washington. Unfortunately, it often results in bad policy outcomes with real economic costs.
A lot has been said about the new plan to replace the Affordable Care Act. For example, it would make health care more expensive for millions of Americans. It would create a new entitlement, in the form of expensive tax credits. It would create an “Obamacare cliff” for the presidential election in 2020, the year when many important parts of the Affordable Care Act would be repealed. It might fail and drive us straight into a single-payer system.
But at the heart of the Republicans’ inability to reform health care is their commitment to this notion that the provision of health insurance is the goal rather than the provision of health care or, more fundamentally, the production of health itself. Though insurance companies love it because it guarantees overinflated profits for their industry, this idea goes a long way toward explaining why the supply of health care remains so expensive, writes Veronique de Rugy.