Why We Should Be Optimistic about Repealing Obamacare and Fixing the Healthcare System

I’m going to make an assertion that seems utterly absurd.

The enactment of Obamacare may have been good news.

Before sending a team of medical attendants to cart me off to a sanitarium, allow me to elaborate. I’m not saying Obamacare is good policy. After all, I’ve written over and over again that it is a budget-busting boondoggle that will exacerbate our real healthcare crisis of third-party payer.

What I am saying, though, is that Obamacare may turn out to be a major political mistake for the left, one that sets the stage for sweeping free market reforms.

Here’s my six-part hypothesis.

1. Our healthcare system as a mess before Obamacare. Normal market forces were crippled by government programs such as Medicare and Medicaid and also undermined by government intervention in the tax code that resulted in pervasive over-insurance that exacerbated the third-party payer problem.
2. These various forms of intervention led to all sorts of problems, such as rising prices and indecipherable complexity, and most people blamed that the “free market” and “private” healthcare.
3. Obamacare was enacted in 2010, and it was perceived to be a paradigm-shifting change in the healthcare system, even though it was just another layer of bad policy on top of lots of other bad policy. Immediately after the legislation was approved, I offered a rough estimate that we went from a system that was 68 percent dictated by government to one that was 79 percent dictated by government.
4. Not surprisingly, all of the same problems still exist, but now they’re exacerbated by the mistakes in Obamacare.
5. But because people think we’ve had a paradigm shift and government now is in charge (pay attention, since this is my key argument), they will be much more likely to blame “Obamacare” and “government” for all the warts and inefficiencies of the healthcare system.
6. This means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan budget.

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All this will be much easier said than done, of course, and it is disconcerting that we’ll probably have to rely on feckless Republicans to implement these reforms.

But at least there’s a plausible scenario for systemic reform, and that wasn’t the case before Obamacare was enacted. In other words, the President’s signature achievement may turn out to be a Pyrrhic victory for the left.

P.S. Watch this excellent video from Reason TV to see how a genuine free market could deliver health care at lower cost and with greater efficiency. For another example, here’s a report from North Carolina on free-market healthcare in action.

P.P.S. This post is part of my let’s-be-optimistic series. Previous editions include:

• The fiscal cliff was a smaller loss than I expected.
• The sequester was a real victory.
• We have good evidence that the Tea Party has made a positive difference.
• The Democratic-controlled Senate rejected a permanent expansion of funds for the IMF.
• The burden of government fiscal policy has been reduced since the 2010 elections.
• The Democrat-controlled Senate approved dynamic scoring.