Scott Walker just made a smart move on health care

Scott Walker, one of the top contenders for the Republican presidential nomination, has been a bit of a Rorschach test. The case for his candidacy mostly rests on his record as governor of Wisconsin, especially the part where he faced down public sector unions. While that shows conservative bona-fides, political smarts, and a backbone — certainly all important qualities in a presidential contender — it doesn't really tell us much about the policies Walker would bring to the presidency.

For a while, Walker has been coasting on this uncertainty, trying to be all things to all people. To his credit, he's been honest about the fact that, as a governor, he hasn't studied federal issues in nearly the depth that he needs to. Now, however, it looks like he's ready to take the test — at least on health care reform.

On Tuesday, Walker debuted his plan to actually repeal and — here's the important part — "replace" ObamaCare. This is noteworthy because Republicans have spent way too long talking about the need to replace it without rolling out an alternative plan on their own. For a long time, this was smart politics — you can only motivate a big coalition for a large-scale political fight by uniting around a single "ask." Plus, opposing a policy that you genuinely think is bad is not necessarily a terrible thing. If you thought the Iraq War was wrong, you shouldn't have to have a plan to magically fix the Middle East to get heard.

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But the time for "repeal and repeal" is long gone. Now that Obama has won reelection, the way to repeal and replace is to get a Republican president and Congress. More importantly, a Republican Party that wants to govern should actually know what it wants to do with the health care system in America. And critically, it's no longer smart politics to be hush-hush about it: Any Republican president is going to have to sell the American people on a genuine vision of where to take the health care system. The reason why Americans reelected Barack Obama even though they didn't like ObamaCare was because they felt — maybe justifiably — that even though they didn't like ObamaCare, they couldn't trust Romney to replace it with anything but, "You're on your own."

And one reason why the Republican Party has been unable to coalesce around an alternative vision to ObamaCare is because there is genuine disagreement among conservatives on where to proceed. In particular, should conservatives try to mimic ObamaCare's goal of expanding coverage, even if it entails spending a little more money? Or should they view increased coverage as essentially irrelevant, focusing instead on expanding access through health care reforms that would increase competition and thus, hopefully, reduce costs?

There is an important argument to make about the merits of the latter case: Looking too myopically at coverage makes coverage, rather than health itself, the goal. For example, Medicaid recipients have "coverage" but don't have better health outcomes than the uninsured.

But here's the thing. First, on the merits, there is nothing wrong, and everything laudable, with the idea that a country as fantastically wealthy as the United States should aim to give every citizen some sort of safety net when it comes to health care.

But conservatives should pay attention to a more pragmatic point: Any reform that doesn't match ObamaCare's coverage numbers is a surefire political loser. And the reason for this is that the GOP's single biggest political problem is that it is perceived as the party of the rich, something which a myopic focus on top-income tax rates and crony capitalism (as well as one Willard Mitt Romney) did little to alleviate. A health care reform that says to current ObamaCare recipients, "You know, figure it out," is the best way to turn off the independent voters that the GOP needs.

Which is why it's a particularly good sign that Walker has opted for a version of the plan proposed by conservative reformers, such as James Capretta, that offers a refundable tax credit to buy health insurance. The key thing is that the credit is refundable, meaning low-income Americans who max out their tax liability with the credit get a check from the government to buy health insurance. This means that everyone can buy it. Walker's plan also offers a tax credit for getting a health savings account, probably the single most important thing we can do to get progress in the American health care system. The plan also proposes to reform Medicaid, something that is badly needed because it ill-serves the poor.

This is the right approach on the merits: By allowing people to buy the health care plan they want, and to control more of their spending, it will increase competition in the health care system and therefore spur innovation and reduce costs. Equally important, it will ensure almost all Americans are covered.

It's also the right approach politically, and a very good sign for American politics writ large. That Scott Walker, aka Mr. Median Republican, is adopting reform conservative ideas shows these ideas are winning. Three cheers for that!