From a fiscal standpoint, Singapore is far better than even Switzerland. Singapore’s public spending on health care as a fraction of GDP is 86 percent lower than America’s. That’s because every Singaporean has a health savings account, which is used to pay for non-catastrophic medical expenses. Singaporeans pay a payroll tax, which is then redirected into the HSA in a manner similar to our Social Security system. But unlike Social Security, the Singaporean HSA is controlled by the individual and supplemented with a government-sponsored catastrophic coverage plan.
The bottom line is that Singapore and Switzerland spend far less on health care than we do and yet achieve all of the things that Americans value about their own system: choice, technology and physician access. Conservatives have long considered universal coverage as an wacky left-wing goal. But these two countries prove that it’s possible to cover everyone in a way that would substantially shrink our government’s health spending and place individuals back in charge of their own health care dollars.
So how do we get there from here? From the perspective of conservative reformers in the U.S., Switzerland and Singapore have their pluses and minuses. The Singaporean system is closer to the U.S. conservative ideal of health savings accounts combined with catastrophic coverage for life-threatening events like cancer or car accidents. But the Swiss system is more politically feasible in the American context because it closely resembles the Ryan Medicare reforms and Obamacare exchanges.
If we learn from both countries, we can achieve a substantial reduction in the scope of government-run health care — and we wouldn’t have to repeal Obamacare to do it.
First, we’d deregulate the Obamacare exchanges and modify the law’s subsidies to broaden Americans’ coverage choices and encourage adoption of health savings accounts and catastrophic coverage.
Second, we’d raise Medicare’s retirement age by three to four months per year forever. Since people below the Medicare retirement age would be in the means-tested exchanges, this would gradually replace the fully subsidized Medicare program. For example, over 15 years the retirement age would be roughly 70, meaning that individuals aged 65 to 69 would get their health insurance through the exchanges.
Third, we’d transform the Medicaid program by folding its acute-care population into the deregulated exchanges, while returning its long-term care and disabled populations fully back to the states, free of federal interference.
Given that conservatives have campaigned on repealing Obamacare for nearly four years, it’s jarring to consider a reform plan that does not formally scrap the law. But such a plan has several advantages.
First, it is far less disruptive to the existing system because it uses a deregulated version of Obamacare’s exchanges to gradually replace our legacy Great Society entitlements. That makes it more politically viable than repeal. Second, it takes advantage of the Obamacare exchanges’ best feature: Over the long term, exchange subsidies will only grow at the rate of inflation, a rate that is significantly lower than the growth of our existing health care entitlements.
When Ryan proposed ensuring that Medicare and Medicaid grow at the rate of inflation, he was lambasted for attempting to balance the budget on the backs of the elderly. By the same token, would Republicans be attacked as callous if they simply took the Obamacare subsidies, which also grow at the rate of inflation, and expanded them to a broader population? Democrats will look silly if they oppose a policy they aggressively supported in 2010. Call it health reform jujitsu.
To credibly advance this approach, conservatives must make one change to their stance: They have to agree that universal coverage is a morally worthy goal. No conservative politicians oppose universal public education; instead, we champion reforms that improve the quality of public education that poor Americans receive. Ensuring that every American has access to quality health coverage is a legitimate goal of public policy, and it can be done in a way that expands freedom and reduces the burden on American taxpayers.
The Left believes that the only way to expand opportunity is to expand the scope and scale of government. Our broken patchwork of health care entitlements gives us the opportunity to prove otherwise. And we can do so while bequeathing to our children and grandchildren something that is almost impossible to imagine: a fiscally sound country.