Federalism is the Fix for Obamacare, and Republicans are Headed in That Direction

In 2010, Democrats essentially federalized healthcare in this country by passing the so-called Affordable Care Act, a.k.a. Obamacare. Through the federally imposed individual mandate and mandates on insurance companies, the ACA moved most health insurance issues to the federal level. By imposing a one-size fits all approach to healthcare, Democrats have trampled states’ rights and driven the deficit into overdrive. By forcing states to follow onerous federal mandates, Obamacare effectively eliminated choice in the healthcare marketplace. The result has been higher prices for less effective care.

Obamacare contains a provision known as “Section 1332 waivers” that allow states to apply for waivers of certain provisions of the ACA, with approval of the Secretary of Health and Human Services. The process to obtain a waiver was intentionally designed to be near-impossible, and there were exemptions from waivers that made them effectively ineffective. Four “guardrail” exemptions to what states could waive were: A waiver proposal had to provide insurance that contained the same coverage mandates as under Obamacare; maintain the same premium and out-of-pocket structure as Obamacare; cover a comparable number of people as Obamacare; and not increase the federal deficit beyond what Obamacare already had. These four exemptions to state waivers basically were Obamacare in framework form, meaning that even if a state could beg DHHS to grant a waiver, it would be a waste of time.

For all the faults included in the Senate Republican version of Obamacare repeal, there is one excellent provision at the heart of the proposal that will, effectively, gut Obamacare in its current form. The Republican plan puts power back into the hands of the States when it comes to healthcare policy. Of the four waiver exemptions included in Obamacare that I listed above, only the provision not to increase the federal deficit will remain under the Republican plan. The new bill provides for immediate approval of waivers from DHHS from the provisions of Obamacare. States can pursue healthcare plans that do not contain all of the onerous coverage mandates under Obamacare that are one-size fits all.

Under the Republican plan, states must still work to increase access to healthcare coverage, but have much more flexibility when it comes to coverage mandates, cost structures, and avoiding onerous federal regulations. The Senate Republican plan is by no means perfect, but it is a strong step in the right direction when it comes to ending the nightmare of Obamacare. I hope that Senate Republicans do not form a circular firing squad but, instead, meet inside their caucus to build consensus, further improve the bill, and pass a real repeal of Obamacare as quickly as possible. By rolling back the regulatory nightmare that is Obamacare, Republicans will make the fiscal room to also cut taxes, reduce, spending, and keep their promises to American voters who gave them control of Washington last year.

Loosening federal control over America’s healthcare system is the first step toward unlocking the potential of the conservative agenda under President Trump and the Republican Congress.