The Real Binary Choices Surrounding “Repeal and Replace”

During the run-up to the aborted vote on House Republicans’ Obamacare “repeal-and-replace” legislation, Speaker Paul Ryan repeatedly called the vote a “binary choice”: Republicans could support the leadership-drafted legislation, or, by failing to do so, effectively choose to keep Obamacare in place.

The rhetoric led to criticism of the speaker for attempting to bully or rush members of Congress into supporting legislation despite policy concerns and political unpopularity. That said, health care policy does involve several largely binary choices. They do not break down along the political fault lines the speaker proposed—support the leadership bill, or support Obamacare—but they demonstrate how health policy involves significant trade-offs that should be made very explicit as part of the policy-making process. Here are just three.

1: Obamacare’s Regulations Are (Mostly) All-or-Nothing

Here’s the problem: As long as insurers are required to accept all applicants regardless of health status or pre-existing conditions—a requirement known as guaranteed issue, and included in Obamacare—removing at least three other important Obamacare regulations would likely lead to unsustainable and perverse outcomes. These three are the following.

Community rating: Theoretically, insurers would have little problem with a requirement to accept all applicants, so long as they can charge those applicants an actuarially fair rate. However, “offering” a cancer patient an insurance policy priced at $50,000 per month would likely yield few acceptances (and would be politically unsustainable).

Obamacare allowed insurers to vary premiums only by age, family size, geography, and tobacco use. The House bill expanded the permissible rating variation, but only with respect to age. While this change would lower premiums for younger applicants, encouraging them to purchase insurance, it might not change insurers’ underlying assumption that applicants will be sicker-than-average.

Essential benefits: Requiring insurers to accept all applicants regardless of health status, but allowing them to vary benefit packages, would create incentives for insurers to structure their policies in ways that discourage sick people from applying.

For instance, no rational insurer would provide much (if any) coverage of expensive chemotherapy drugs, because doing so would prompt a flood of cancer patients to purchase coverage and run up large bills. Since Obamacare’s passage, HIV patients have already faced discrimination because of these inherent flaws in the law, even with the essential benefit requirements in place. Removing them would only accelerate a “race to the bottom.”

Actuarial value: Here again, removing the requirement that plans cover a certain percentage of expenses would lead to a rapid downsizing of generous plans from the marketplace—again, so insurers can avoid sick patients. Platinum plans have already become a rare breed on the Obamacare exchanges; removing the requirements would likely cause gold and silver plans to disappear as well.

These four major regulations—guaranteed issue, community rating, essential health benefits, and actuarial value—are inextricably linked. Repealing only one or two without repealing all of them, particularly the guaranteed issue requirements, would at best fail to lower premiums (largely what the Congressional Budget Office, or CBO, concluded about the House bill) and at worst could severely disrupt the market, while making the sickest individuals worse off.

CBO views these four interlinked changes as at the heart of the Obamacare regulatory regime. While lawmakers could repeal piecemeal other mandates beyond the “Big Four,” such as the requirement to cover “dependents” under age 26, or the preventive services mandate, doing so would have a much smaller effect on reducing premiums than the four changes referenced above.

2: Keeping Obamacare Regulations Requires Significant Insurance Subsidies

The January CBO analysis of the 2015 repeal bill passed under reconciliation illustrates the second binary choice. Because that 2015 reconciliation bill repealed Obamacare’s insurance subsidies (after a delay) and mandate to purchase coverage, but not its regulatory requirements on insurers, CBO concluded that the bill would severely damage the individual health insurance market. By 2026, premiums would double, and about three-quarters of the country would have no insurers offering individual insurance coverage, in CBO’s estimate.

The analysis revealed one big reason why: Eliminating subsidies for insurance would result in a large price increase for many people. Not only would enrollment decline, but the people who would be most likely to remain enrolled would tend to be less healthy (and therefore more willing to pay higher premiums). Thus, average health-care costs among the people retaining coverage would be higher, and insurers would have to raise premiums in the non-group market to cover those higher costs.

By contrast, CBO concluded that this year’s House Republican bill, which (largely) retained Obamacare’s regulations and included a new subsidy for insurance, would lead to a stable marketplace: “Key factors bringing about market stability include subsidies to purchase insurance, which would maintain sufficient demand for insurance by people with low health care expenditures…”

The obvious conclusion: While the individual health insurance market remained relatively stable without subsidies prior to Obamacare, and repealing both the law’s subsidies and its regulations would restore that sustainable market, as long as the regulatory changes wrought by the law remain in place, the market will require heavy insurance subsidies to remain stable.

3: Banning Pre-Existing Condition Consideration Versus Repealing Obamacare

This binary choice follows from the prior two. If the “Big Four” insurance regulations are so interlinked as to make them a binary proposition, and if a market with those “Big Four” requires subsidies to remain stable, then Republicans have a choice: They can either retain the ban on pre-existing condition discrimination—and the regulations and subsidies that go with it—or they can fulfill their promise to repeal Obamacare.

It’s not that others derided the House bill as ‘Obamacare Lite,’ it’s that the bill qualifies as such under Ryan’s own definition.

Consider, for instance, Ryan’s response to a reporter on February 16 questioning the similarities between the refundable tax credits in the House plan (later the House bill) and Obamacare: “They call them refundable tax credits—they’re subsidies. And they’re subsidies that say ‘We will pay some people some money if you do what the government makes you do.’ That is not a tax credit. That is not freedom. A tax credit is you get the freedom to do what you want, and buy what you need—and your choice.”

Based on Ryan’s own definition, the House bill qualifies as an Obamacare-esque subsidy, and not a tax credit. It gives some people (those with employer coverage or other insurance do not qualify) some amount—the credits had to be means-tested to solve major CBO scoring issues—if they buy insurance that meets government requirements.

For an individual “buy[ing] what [they] need,” the option to purchase health insurance without under-26 “dependent” coverage, or without maternity coverage for males, did not exist. So it’s not that others derided the House bill as “Obamacare Lite,” it’s that the bill qualifies as such under Ryan’s own definition.

Much of the problem lies in House Republicans’ Better Way proposal released last summer, which stated a desire to retain Obamacare’s pre-existing condition provision. The import of this proposal was not clear at the time. There are other, simpler ways to provide coverage to individuals with pre-existing conditions (such as high-risk pools), and as Yuval Levin has pointed out, prior conservative health proposals did not include promises on pre-existing conditions. But Republicans’ unwillingness to upset the Obamacare standards for pre-existing conditions has significantly boxed in the party’s policy options regarding repeal.

To Govern Is To Choose

As with Barack Obama in 2008, Republicans face a self-inflicted dilemma, having over-promised voters by claiming they could keep the popular portions of Obamacare (pre-existing condition protections) while repealing the law.

But Republicans face what looks increasingly like a binary choice: going back to the status quo ante on pre-existing conditions, or breaking their seven-year-long pledge to repeal Obamacare. As the saying goes, to govern is to choose—but in this case, failing to govern may be the worst choice of all.

This post was originally published at The Federalist.

What Will Republicans Do about Obamacare Now?

For the past six years, Republicans — across Washington, and across the country — have virtually to a person run against Obamacare. Their campaign has helped them win numerous House and Senate seats, a majority of governorships, and now has given them unified control of Washington for the first time in 15 years. Like the dog that finally caught the proverbial car, Republicans will wake up Wednesday morning asking themselves — on Obamacare, as on many other issues — “What now?”

The answer might be less obvious than it first appears. Democrats used the decade and a half between the defeat of Hillary Clinton’s health plan in 1993–94 and the 2008 election to develop a consensus architecture about what their ideal health-care plan would look like. In the Democratic primaries that year, Senators Clinton and Obama disagreed strongly on the necessity of an individual mandate to purchase coverage — a difference they litigated very publicly, and at great length, during the primary campaign — but agreed on virtually everything else.

By contrast, Republicans spent comparatively little time debating the finer points of an Obamacare alternative during the presidential cycle just concluded. Donald Trump promised “something terrific” that would tear down “the lines around the states,” but details were few and far between (and occasionally self-contradictory). Speaker Ryan’s House Republican task force produced a plan, but one with few fiscal details attached, and one that few in Washington — whether media analysts or policy-makers themselves — spent time dissecting or debating.

As a result, Republicans differ on some fundamental issues — chief of which is whether an alternative to Obamacare should focus on lowering costs or expanding coverage. While conservatives have historically focused on reducing costs, some on the right have argued that any alternative to Obamacare must provide a landing point for the individuals who gained health coverage under the law. Others have dubbed any alternative plan including mechanisms such as refundable tax credits to expand coverage “Obamacare Lite” — a term likely to resurface with a vengeance in the coming days and weeks.

Speaker Ryan and Mr. Trump thus face a potential squeeze between a Republican political base adamantly opposed to Obamacare, which wants the law repealed — in its entirety, immediately — and the ramifications of doing just that. Would Republicans who passed a repeal bill through Congress last fall, only to see it vetoed by President Obama, do so again knowing it would actually get signed into law? Some lawmakers likely supported repeal in theory — not expecting it would ever get put into practice. They will face no such “easy” votes in 2017.

It remains an open question whether a bill that repealed Obamacare without a “replace” plan attached could receive enough votes from Republican lawmakers to reach a President Trump’s desk. It likewise remains an open question whether Republicans can coalesce around the details of an alternative to place on the statute books. Anyone who believes that debate or discussion will be easy, or quick, did not spend time covering the circular firing squad that enveloped congressional Democrats in both 1993–94 and 2009–10.

A major initial test for Mr. Trump: What to do about Obamacare’s cost-sharing subsidies — funds that the Obama administration has provided to insurers, even though the text of the law itself nowhere provides an explicit appropriation for such spending. As I previously noted, Mr. Trump could immediately cut off these funds to insurers upon taking office. Such an action would be entirely consistent with House Republicans’ lawsuit against the administration for spending money not appropriated — and the initial legal victory they received from the courts in May.

But others have reported that the Obama administration has negotiated language in insurers’ contracts for next year allowing them to cancel plans immediately should a future Trump administration cut off insurers’ access to the cost-sharing subsidies during the middle of the 2017 plan year. So what does a President Trump do? Block the subsidies — and potentially get blamed for chaos if millions of people lose their plans overnight? Or continue spending on subsidies that House Republicans have called unconstitutional, and face a federal lawsuit from members of his own party? Neither answer presents an appetizing option for the incoming administration.

After the battle of El Alamein changed the tide of World War II, Churchill remarked that the Allied victory marked not the end, nor the beginning of the end, but perhaps the end of the beginning. In the fight against Obamacare, Tuesday likewise marked not the fulfillment of a Republican campaign promise, but merely the initial prerequisite necessary to reach that goal. The goal is in sight, but farther away than some might believe. Having spent years running against Obamacare, it is now up to Republicans to determine what to do about it — an outcome that few would have dreamed of even 24 short hours ago.

This post was originally published at National Review.

The Tax and Spending Implications of King v. Burwell

A PDF of this memo is available through America Next.

Many analysts have talked the potential implications of the upcoming Supreme Court case of King v. Burwell, which debates the legality of Obamacare insurance subsidies offered in the 37 states that have not established state-run insurance Exchanges.1 However, few have noticed one key implication: A Court ruling striking down the subsidies in those 37 states would result in both a net tax cut and a decrease in federal spending and deficits. Conversely, subsequent actions, whether by Congress or by states, to re-establish the flow of premium subsidies will raise taxes, raise spending, and increase the deficit.

Tax Implications

A Court ruling striking down the subsidies in the 37 states that have chosen not to establish state-run Exchanges would have several follow-on effects for other provisions of the law. Recently updated Congressional Budget Office (CBO) baseline estimates2 illustrate the magnitude of these implications if applied nationwide to all 50 states:

  1. Most obviously, the premium subsidies would disappear in the states that have not established their own Exchanges. While Obamacare calls these subsidies premium tax credits, most of the credits are paid on a refundable basis—that is, government subsidies to individuals and families with no income tax liability. CBO and other budget scorekeepers consider such refundable credits government outlays, and not tax cuts/revenue reductions. Eliminating the subsidies nationwide would result in a $775 billion reduction in outlays—the refundable/spending portion of the credits—over ten years, while increasing revenues—i.e., raising taxes for recipients who had actual income tax liability prior to receiving their subsidies—by $134 billion in the same period3.
  2. Because Obamacare’s employer mandate penalties only apply when employees have received premium subsidies, the employer mandate would not apply in states that have not created Exchanges, and whose citizens are therefore ineligible for subsidies.4 Nationally, eliminating the employer mandate would result in a $164 billion tax cut over ten years.5
  3. The individual mandate would be significantly weakened in states without state Exchanges. The law provides an exemption for all those for whom insurance premiums exceed 8.05 percent of income, after the application of subsidies.6 If subsidies become unavailable in the 37 states that have not established their own Exchanges, virtually all households receiving subsidies— those with incomes under 400 percent of the federal poverty level (FPL)—would become exempt from the mandate.7 In June 2014, CBO estimated that households with incomes under 400 percent FPL will pay 39% of the total mandate penalties to be collected in 2016.8 Extrapolating this 39% number to the ten-year estimated revenue raised by the mandate—$47 billion, according to CBO’s recent baseline—yields a total tax cut of $18.3 billion from the weakening of the mandate penalties.9

Thus, if subsidies were eliminated in every state, net tax liabilities would fall by approximately $48.3 billion over ten years—which includes the tax cut associated with effectively eliminating the employer mandate ($164 billion), and the revenue loss associated with weakening the individual mandate ($18.3 billion), offset by the tax increase associated with the revenue portion of the premium tax credits ($134 billion). Conversely, restoring those subsidies if eliminated by a Court ruling would impose a net tax increase of $48.3 billion over ten years.

Spending and Deficit Implications

Because, as noted earlier, the vast majority of the premium subsidies are refundable tax credits, which are considered government outlays, a ruling striking down the subsidies would lower federal spending appreciably. Eliminating the subsidies in all 50 states would lower federal spending by $775 billion over the next ten years.10 As a result, despite the $48.3 billion tax cut described above, eliminating the subsidies nationwide would reduce the deficit by approximately $726.7 billion for the coming decade. But if Congress or the states took action to restore the flow of subsidies, those measures would instead increase spending—and the federal deficit— by hundreds of billions of dollars.

Admittedly, the King v. Burwell case applies only to the 37 states that have not created an Exchange, and not all 50 states. However, whether examining one state, 37 states, or all 50 states, the trend from the CBO data is clear: Striking down the subsidies would 1) cut taxes on net; 2) reduce federal spending; and 3) reduce the deficit. Conversely, any action—whether by states, Congress, or both—to restore the pre-King status quo would 1) raise taxes; 2) raise federal spending; and 3) raise the deficit.

Moreover, this analysis may represent a conservative estimate with regards to the tax cut implications of King v. Burwell, as a favorable Court ruling could have a larger-than-expected impact on the applicability of the individual mandate. Withdrawing subsidies from federally-run Exchanges could also impact premium affordability for families with incomes above 400% FPL, reducing tax liabilities beyond the $18.3 billion estimated above.

Conclusion

The dispute in King v. Burwell revolves around whether the Obama Administration can unilaterally change what the law says. The text of the statute is clear that federal subsidies apply only to those buying policies from an “Exchange established by the state.”11 Yet the Administration promulgated regulations expanding the applicability of subsidies to all Exchanges, whether established by states or run by the federal government.

Conventional wisdom in Washington holds that, in the event of a favorable King v. Burwell ruling striking down the Obama Administration’s rule, Congress—or legislatures in the 37 states affected—will rapidly act to create state Exchanges, or allow some mechanism for subsidies to continue to flow. However, doing so will have significant adverse impacts—raising taxes, raising spending, and raising the deficit. Moreover, resuming the flow of subsidies will only further entrench both Obamacare and its harmful effects—on our budget, on our economy, and on our health care system.

Conservatives should reject any “Obamacare-lite” proposals that seek to re-establish, and further entrench, the tax increases and spending hikes under the President’s unpopular health care law.12 Instead, policy-makers should embrace the opportunity potentially presented by the Court’s upcoming ruling in King v. Burwell to advance solutions that solve the health care problem Americans worry about most—rising costs. Policies that address the problem of cost growth—including the innovative solutions put forward by America Next last spring—without resorting to Obamacare’s tax increases, massive spending, and new entitlements stand the best chance of winning the widespread public support Obamacare has consistently lacked.13

The impending Supreme Court arguments and decision in King v. Burwell provide conservatives with both a challenge and an opportunity. The case gives Congress and the states a chance to craft positive solutions on health care—granting relief to the American people from both Obamacare and rising costs—provided that they recognize more taxes, spending, and deficits are not the answer.

Notes

1. Includes 3 Federally-supported, 7 State-Partnership, and 27 Federally-facilitated Exchanges. See Kaiser Family Foundation, “State Health Insurance Marketplace Types, 2015,” http://kff. org/health-reform/state-indicator/state-health-insurancemarketplace-types/.
2. Congressional Budget Office, “Insurance Coverage Provisions of the Affordable Care Act—January 2015 Baseline,” January 26, 2015, http://www.cbo.gov/sites/default/files/cbofiles/ attachments/43900-2015-01-ACAtables.pdf.
3. Ibid., Table B-3.
4. Patient Protection and Affordable Care Act (PPACA), Public Law 111-148, Section 1513.
5. Congressional Budget Office, January 2015 baseline, Table B-1.
6. Section 5000A(e) of the Internal Revenue Code, as created by Section 1501 of PPACA, provides an exemption from the individual mandate for all those for whom self-only insurance coverage exceeds 8 percent of household income, “reduced by the amount of the credit allowable”—i.e., any applicable federal premium subsidies. The statute further provides for an annual adjustment of the threshold percentage, based on the rate at which premium growth exceeds income growth since 2013. In May 2014, the Centers for Medicare and Medicaid Services set the required contribution percentage for calendar year 2015 at 8.05 percent of income. See Centers for Medicare and Medicaid Services, “Patient Protection and Affordable Care Act: Exchange and Insurance Market Standards for 2015 and Beyond,” Federal Register May 27, 2014, http://www.gpo.gov/fdsys/pkg/FR-201405-27/pdf/2014-11657.pdf, pp. 30243-44.
7. In calendar year 2015, 400% of FPL equals $47,080 for a single individual, and $97,000 for a family of four. See federal poverty guidelines available through the Department of Health and Human Services’ Office of Planning and Evaluation, http://aspe. hhs.gov/POVERTY/15poverty.cfm.
8. Congressional Budget Office, “Penalties for Being Uninsured under the Affordable Care Act: 2014 Update,” June 5, 2014, http:// www.cbo.gov/sites/default/files/45397-IndividualMandate.pdf, Table 1.
9. Congressional Budget Office, January 2015 baseline, Table B-1.
10. Ibid.
11. Section 36B(b)(2)(A) of the Internal Revenue Code, as created by PPACA Section 1401(a).
12. Gov. Bobby Jindal, “The GOP Mustn’t Offer ‘Obamacare-Lite,’” Politico February 1, 2015, http://www.politico.com/magazine/ story/2015/02/gop-obamacare-alternative-114820.html#. VOu9RVaprwJ.
13. See America Next’s Freedom and Empowerment Plan, available at http://americanxt.org/wp-content/uploads/2014/04/The-Freedomand-Empowerment-Plan.pdf.

Gov. Jindal Op-Ed: Republicans Shouldn’t Try to Save Obamacare Subsidies in Wake of King Ruling

A Supreme Court ruling restoring the original language of Obamacare — nullifying the administration’s rule, and striking down subsidies in the 37 states — would have several knock-on fiscal effects. Because Obamacare’s employer mandate is directly tied to the subsidies — firms not offering coverage pay the penalty only if their workers receive federal premium assistance — the mandate taxes will disappear in those 37 states. Likewise, the individual mandate’s affordability test is linked to the subsidies; the mandate only applies if coverage is affordable after any premium subsidies received. Removing them will dramatically weaken the individual mandate, reducing both the number of people to whom it applies and the amount of revenue it will raise.

Eliminating the subsidies nationwide would therefore cut Americans’ tax liability by approximately $48 billion on net. Granted, these sums from CBO apply to all 50 states, while the King ruling would apply only to the 37 states that have not established exchanges. But the trend from the numbers is crystal clear: The tax reduction from eliminating the employer mandate, and weakening the individual mandate, outweighs any tax increase from eliminating the subsidies — meaning a favorable ruling in King v. Burwell would cut Americans’ taxes by many billions.

That’s a “solution” in search of a problem. If eliminating the subsidies represents a net tax cut, then restoring the subsidies — whether by states creating their own exchanges, Congress passing new legislation, or some combination of the two — would re-impose a sizable tax increase. Americans would pay billions more in higher taxes to fund the newly restored subsidies, making Obamacare that much more entrenched. What self-proclaimed conservative of sound mind would do such a thing?

Alternatively, some have talked about enacting a “compromise” that would restore the Obamacare subsidies while reforming some of the law’s new insurance requirements and regulations. But restoring the flow of subsidies means restoring the employer mandate, thus raising taxes. And even if such a “compromise” weakens or eliminates the employer mandate, the Obama administration — to say nothing of the insurance companies themselves — will hardly countenance a repeal of the individual mandate, which restoring the subsidies will only strengthen. So those seeking to restore the flow of subsidies will likely end up having to raise taxes on millions of Americans, in some way, shape, or form.

As they ponder both these facts and their response to King v. Burwell, conservatives would do well to remember President Bush’s view of his 1990 tax reversal: “I did it, and I regret it, and I regret it.” Republicans have spent the past 25 years fighting efforts to raise taxes — and the past five years fighting Obamacare — in an effort to restore the trust of the American people lost on that fateful day in October 1990. As we saw then, neither history nor the voters will be kind to those politicians who choose to break their word to the public. Here’s hoping that conservatives of all stripes have finally learned that lesson.

This post was originally published at National Review.

Gov. Jindal Op-Ed: Rebuttal to Ramesh Ponnuru

My op-ed this week regarding the need for conservative alternatives to Obamacare has prompted numerous responses, including one on these pages. I’m happy to continue this debate by explaining my plan further, and outlining why I believe it’s the preferable choice for conservatives to embrace.

In his column analyzing my plan, Ramesh Ponnuru criticized it on several counts. He calls its “great flaw” that the plan might disruption when compared to Obamacare. But while some may view that as a bug, others might view it as a feature. For instance, the millions of individuals who received cancellation notices might like the opportunity to purchase more affordable coverage without facing the Obamacare mandates that have jacked up their premiums. Likewise the six million Americans about to face the Obamacare mandate tax for the first time come April 15—or the millions more who will face more red tape as they have to apply to Washington for a mandate exemption.

Two other numbers bear particular emphasis. Last spring, the Congressional Budget Office estimated that delaying the individual mandate until 2019 would raise the number of uninsured Americans by 13 million. In other words, under Obamacare, 13 million Americans will receive health coverage because the federal government is forcing individuals under penalty of taxation to buy it. Making sure none of those individuals—many of whom may never have wanted to buy insurance in the first place—have their coverage disrupted would cost far more in taxes than any alternative to Obamacare would raise.

The second number is $2,500—that’s the reduction in premiums Barack Obama promised from his health plan during the 2008 campaign. But according to an America Next analysis last year, the President’s failure to deliver on that promise has cost the American people more than $1.2 trillion in higher premiums just from 2009 through 2013.

In critiquing my proposal, Ponnuru falls into the typical trap of the Left—to evaluate a health plan primarily, if not exclusively, by how many people it provides with insurance cards. I fundamentally disagree with that premise. The American people are worried first and foremost about the rising cost of health coverage—it’s what makes their health care unaffordable, and Obamacare unsustainable.

That’s why my plan emphasizes attacking rising health costs, and not expanding coverage—because focusing on the former is the best way to achieve the latter. Conversely, fixating on the latter—trying to mandate coverage through new regulations, taxes, and Washington diktats—will only make the former less attainable—raising health costs in a way that no regime of taxpayer-funded subsidies could ever sustain.

That said, my plan absolutely includes a safety net for the most vulnerable. It provides at least $100 billion for states to guarantee access for individuals with pre-existing conditions. Rather than dictating a top-down approach from Washington, our plan lets the states decide how best to increase access for their citizens. And it does so in a way that encourages states to reform their existing regulatory regimes—helping to bring down costs.

I believe this plan—focusing first and foremost on reducing costs, and doing so through the states, not Washington, DC—provides the best path forward, most closely adheres to conservative principles, and provides a telling contrast to Obamacare’s shortcomings and failures. To win elections, conservatives need to have better ideas, not merely mimic the ideas of the Left.

This post was originally published at Bloomberg.

Gov. Jindal Op-Ed: The GOP Mustn’t Offer Obamacare Lite

There is a secret that people outside of Washington, D.C., aren’t aware of right now: Some Republicans in Congress are on the verge of proposing an alternative to Obamacare that imposes new tax hikes on the American people.

On March 4, the Supreme Court will hear arguments in a case that could upend Obamacare completely. In King v. Burwell, the court — if it follows the plain text of the law, which says that only individuals purchasing coverage on an “exchange established by the state” are eligible for federal insurance subsidies — could cause disruption to individuals in the 36 states that did not establish a state exchange, and instead rely on the federally run healthcare.gov exchange. For this reason, many observers have argued that conservatives need to present an alternative vision of health reform before the court rules.

Take one major issue related to Obamacare: taxes. The law is chock full of them — no fewer than 18 revenue raisers totaling over $1 trillion through 2022.Yet several alternative proposals being discussed by Republicans don’t actually repeal the law’s tax increases. Instead, they repeal the law’s tax increases, only to replace them with new revenue hikes. So, rather than raise taxes by more than $1 trillion, as Obamacare did, these plans raise taxes by perhaps, say, “only” $500 billion.

This puts Republicans in the positions of being “cheap” Democrats, or Democrat-lite. We’ll raise taxes — but just … less than Obamacare. We’ll spend hundreds of billions on new entitlement programs — but just … less than Obamacare.

But the problem with programs that look like Obamacare is that they bring with them many of Obamacare’s problems. Remember when the Congressional Budget Office concluded that Obamacare will result in more than 2 million Americans working fewer hours, or leaving the labor force altogether? That’s because the law’s insurance subsidies are structured in ways that will cause individuals to work fewer hours, keeping their income low to maintain eligibility for subsidized insurance. Some so-called conservative health plans also have characteristics that will discourage work — even if perhaps less than Obamacare does.

So why talk about “conservative” health care reform if our vision turns us into cheap liberals? Why complain that Obamacare is expanding welfare and dependency, only to propose a similar — albeit smaller — program that could well have the same effects? If conservatives oppose Obamacare’s tax increases on the middle class, then why did one “conservative” health adviser propose accelerating the law’s tax on health plans by phasing it in sooner?

The reality is that while Beltway insiders in the elite salons of Washington can do and say whatever they want, the American people know better. A majority of voters — and even larger majorities of conservative and Republican voters — believe that “any replacement of Obamacare must repeal all of the Obamacare taxes and not just replace them with other taxes.” In other words, the voters won’t be fooled by quasi-liberal health plans masquerading in conservative clothing.

The other good news is that truly conservative health plans exist. Last year, I outlined a plan with America Next, the conservative policy group I founded. The plan focuses like a laser beam on controlling the health care issue that matters most to Americans — skyrocketing health costs. The plan empowers the states to enact reforms that can bring down costs, while also guaranteeing access for individuals with pre-existing conditions. Rather than stifling states with additional regulations from Washington, the America Next plan offers them incentives to improve their insurance markets in ways that offer more choices and lower costs. As a result, Americans should benefit from new avenues to buy portable health insurance they can own themselves — through their church, alumni group or trade association — and lower premiums, too. In fact, the Congressional Budget Office previously analyzed reforms similar to those in the America Next plan and found that they could reduce individual health insurance premiums by thousands of dollars per family.

I recognize there are other good conservative plans out there — and that’s great. For instance, the Republican Study Committee proposed reforming the tax treatment of health insurance without repealing and replacing the tax increases in Obamacare. We should have a robust debate and show both the Supreme Court and the American people that there are better ways to enact true reforms. But I don’t believe that any plan that repeals and replaces Obamacare’s trillions in taxes and spending is a conservative alternative — and the American people agree.

Recently, the left gave us an instructive lesson on why this debate about a conservative alternative is so important. The advocacy group Families USA released a report calling for a veritable orgy of new Obamacare-related spending — new subsidies, insurance mandates, even a proposal to extend subsidized insurance to illegal immigrants. It’s an important reminder, first that the left will always want more government intrusion in health care, and second that conservatives can never hope to outspend the left by acting as cheap liberals. That’s why it’s so important for our party to outline a conservative — repeat, conservative — vision for health care.

This post was originally published at Politico.