Republicans are lost in the wilderness on health-care policy

The cynical explanation for Sen. Lindsey Graham's warning last weekend that failure to repeal the Affordable Care Act would mean the eventual enactment of "BernieCare" and "single-payer socialism" is that he was trying to whip up the rubes. Graham was speaking on Breitbart's Patriot Channel on satellite radio, after all; he wasn't talking soberly about public-policy alternatives.

"This is not about repealing and replacing ObamaCare. This is about stopping a march towards socialism," Graham said with bellicosity.

But sadly, there's reason to believe Graham actually believes the nonsense he's spewing. Indeed, when it comes to health-care policy, his entire party seems dazed and confused.

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"Let's just get to the heart of the matter: If you're not for this, then you really go to wonder whether or not you're a Republican because the Republican philosophy is the government closest to the people is the best government," Graham continued, limning a tranquil future in which socialism-eschewing residents of red states like South Carolina will be able to complain to their governor and statehouse representatives — you know, the same folks who oversee the DMV — about the quality of their health care.

Graham's brave-new-laboratory approach to health care, and its blithe Jeffersonian romanticization, is indicative of the biggest problem Republicans have in their quest to repeal ObamaCare: They know what they're against — "Socialism!" — but they don't actually know what they're for. Or, put another way, they don't know what what they're for would actually do. As Jonathan Chait writes: "[I]f state-based health-care regulation creates a paradise of universal coverage and low rates, then nobody will have much incentive to change it. But Republicans have zero examples of any such experiment working, and no reason to believe that lower funding levels will do anything other than reduce the amount of care."

Now, this isn't completely fair; health-care policy intellectuals on the right do point to the Medicare Advantage and prescription drug programs as precedents for the success of blending federal funding with the private insurance marketplace. (Others are quite open about their opposition to universal coverage as a worthy goal in the first place.) But these are still federally run programs, and Chait is broadly right about the lack of evidence for the magical thinking that underpins Republicans' philosophy of block-granting money to states.

This is primarily a problem of ideology existing in a bubble. In the earliest days of what Claremontian conservatives pompously call the "administrative state," there was a status quo in which one could reasonably identify as a "free market." Before there were laws — state laws, even! — limiting the amount of hours an employee could work in a bakery, there were … no laws limiting the amount of hours an employee could work in a bakery.

In the health-care arena, there is no such Edenic paradise of silent law. We start with the gigantic accident of insurance tied to your job, and then we work our way into a crazy quilt of payroll tax-financed social insurance (Medicare) for the elderly and a separate but related federal-state hybrid program to cover the indigent (Medicaid). The bill that Graham is now championing along with Sen. Bill Cassidy (R-La.) essentially overhauls one of these programs (Medicaid) to give states more flexibility to spend less money.

The Cassidy-Graham proposal is not a minor change to current law by any stretch. But it hardly ushers in a new era of market-based health insurance; "states" are not synonymous with markets, and governors do not run businesses. To an extent, it devolves responsibility for policy outcomes from one level of government to another — and perhaps that will lead to better health outcomes and equally broad coverage (I remain skeptical).

Such changes do not restore the power of Adam Smith's "invisible hand." They merely change the grip of a still highly visible hand of government. In their never-say-die zeal to repeal ObamaCare, Republicans aren't marching in the opposite direction of socialism. They're not even marching on a different base. At best, they're sleeping in separate barracks.