Matthew Yglesias reads Ramesh Ponnuru and Yuval Levin. I think he reads them wrongly. According to them, the sensible conservative alternative to the ACA is not the ACA but rather a process that leads us in a decade to single payer:
Yglesias » The Sensible Conservative Alternative To The Affordable Care Act Is The Affordable Care Act: Ramesh Ponnuru and Yuval Levin have a thoughtful New York Times op-ed about the desperate need for conservatives to come up with a substantial alternative on health insurance reform. There proposal, which has a lot of intuitive appeal, is to rescind the costly tax break for employer-provided health insurance and use the funds thereby raised to provide Americans with subsidies to purchase health insurance on the individual market.
There’s a lot to like about this idea, but there’s also a major problem: Adverse selection. If you simply do what Ponnuru and Levin propose, every insurance company will be competing to offer a product that’s attractive to young men with no chronic health problems and unappealing to everyone else. To turn this idea into an idea that actually works for people with medical needs you need to do three things. One, you need to prevent firms from turning customers away because of their health status or demographic characteristics. Two, you need some kind of regulatory definition of the minimum benefits that need to be offered in order to qualify as “health insurance” that’s eligible for the tax credit. And three, you need some kind of penalty for failing to enroll yourself in a plan to ensure the existence of a viable risk pool. What you need, in other words, is the Affordable Care Act and its regulate/subsidize/mandate tripod structure.
Which is exactly how it should be. The Affordable Care Act is the sensible centrist alternative to the progressive idea of Universal Medicare and the free market idea of Nobody Gets Health Insurance Because of Adverse Selection. That’s not to say that center-right thinkers need to love the Affordable Care Act in all its details. My assumption is that Ponnuru and Levin would prefer a less generous minimum benefits package than the ACA envisions as well as a less redistributive tax policy to pay for it. And in a sensible world, this is what the ACA debate would have looked like. Conservatives would have asked for concrete concessions on the tax and generosity side, Democrats eager for bipartisan cover would have made some concessions, and a bipartisan bill would have passed. Then in decades to come, we’d continue debating the precise contours of the subsidy levels and the regulatory minimums. But instead the right wages a scorched earth campaign against a centrist proposal and now we have smart National Review writers reinventing the wheel on the Times op-ed page.
I don't think Ponnuru and Levin are in favor of the Affordable Care Act. I think that they support a process that leads to single-payer health care.
Eliminate the deduction for employer-sponsored health insurance and use the money to provide subsidies for the poor to purchase insurance on the individual market. But you are still left with the sick formerly covered by their employers who now cannot purchase individual insurance. Some of the money needs to be diverted to Medicaid to cover the costs of treating them. And then you have the adverse-selection unraveling of the individual market. Every year some people conclude that they cannot afford health insurance and so go naked and, if they get sick, throw themselves on the emergency rooms. Thus every year individual-market insurance premiums go up. The individual market unravels. And eventually--but it will take a decade of chaos--everybody but the rich will be in Medicaid, and we will have single payer.