Why ObamaCare is a victory for free-market conservatism

The catalyst for the first government shutdown in 17 years is the GOP's belief that it was worth grinding Washington to a halt over President Obama's signature health care bill.

Talking about his resistance to the Affordable Care Act, Rep Ted Yoho (R-Fla.) compared himself to Fred Flinstone's feet, putting the brakes on a government that was "running 100 miles an hour toward socialism."

Rep. Paul Broun (R-Ga.), meanwhile, said ObamaCare was nothing less than the death of America's free-market system. "It's gonna destroy our economy," he said. "And it's going to push us into a total economic collapse of America."

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However, a new analysis of the Affordable Care Act's health insurance exchanges — where the uninsured can shop for insurance online — shows that those concerns might be overblown. In fact, ObamaCare could be considered downright conservative.

Peter Gosselin, senior health-care policy analyst with Bloomberg Government, examined the health insurance rates in 36 states. His findings: The new exchanges established by ObamaCare are driving down premiums by as much as one-third, something that "shows the effect of competition in a market that has seen almost none until now — that for individual health insurance policies."

Those effects scale up, he found, with the "larger the number of insurers operating in a given market, the lower the price of coverage." This, Gosselin wrote, is "early evidence that exchanges may be able to make good on the promise of delivering cost-constraining price competition even as they expand coverage."

More competition equals better service and lower prices? That certainly sounds like a conservative idea!

Of course, ObamaCare opponents would counter that the individual mandate — which requires individuals to buy insurance or pay a tax penalty — isn't conservative at all. Indeed, they say it's the starkest example of Obama's attempts to shove the government's tentacles into every corner of the economic system.

But that complaint glosses over the profoundly un-capitalistic nature of the health care market before ObamaCare, in which insurers had no incentive to lower prices despite overwhelming demand. (The same dynamic can be seen in the higher education market, where college tuition has outpaced inflation by a long shot.) The whole point of ObamaCare is to tweak the system so that insurers behave like normal companies in a capitalist framework — and that tweak, more or less, is the individual mandate, which will encourage companies to compete for customers who aren't just young and healthy.

Indeed, that's why ObamaCare's first iteration was implemented by a Republican governor, one Willard "Mitt" Romney of Massachusetts.

Furthermore, if the exchanges prove wildly successful, you could see the health insurance marketplace change to a purer system in which everyone buys insurance directly from insurers — as opposed to getting it through a middleman, usually a grudging employer that would rather not pay your health care costs.

ObamaCare certainly has its problems, especially technical ones, despite assurances from public officials that the exchanges would be ready to go on Oct. 1. But trying to repeal it might not be the GOP's best bet. "Indeed, the great irony of ObamaCare’s victory at the ballot box," says National Review's Avik Roy, "is that there remains a path for the most desired conservative outcome of all: A fiscally sustainable, fully reformed set of health-care entitlements."

What he means is that ObamaCare, in some respects, has put the private health care market on a path to become more efficient. Conservatives, he says, should work on strengthening those components, while reducing reliance on the actual socialistic programs in the U.S. health care system: Medicare and Medicaid.

But Republicans would have to first stop treating ObamaCare as the death of capitalism and freedom.