How Republicans Can Fix What Democrats Got Wrong on Health Care

When Barack Obama was running for president in 2008 he had two important health care positions.

First, he said that the government was giving too much money to Medicare Advantage plans, which today provide about one-third of seniors with private health insurance very similar to the plans most non-seniors have. He even implied that without the unjustified subsidy, Medicare Advantage plans might wither on the vine so to speak, as seniors returned to traditional Medicare. Second, he promised to replace the individual market with what today most people think of as “Obamacare.”

Medicare Advantage was created by Republicans, and Obamacare was created by Democrats. Yet the two systems are remarkably similar. Both provide government subsidies for private insurance. Both require community rating (that is, charging the same premium regardless of health condition) and both are guaranteed issue (no one can be turned down). Both have penalties if eligible people choose to be uninsured and fail to enroll. Both have mandated benefits. Both have exchanges where insurers compete and in both insurers are free to have their own networks and pay doctors and hospitals whatever fees they negotiate. Both systems have an annual open enrollment period, allowing enrollees to switch plans.

There is, however, one big difference.