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Health care costs

The Only Defensible Obamacare Deal: Freedom to Choose Better, More Affordable Health Insurance

Strategic Insights

— 1 min read

In the ongoing debate over Obamacare subsidies, Michael F. Cannon proposes a compromise that involves trading a temporary extension of subsidies for the wealthy for a permanent restoration of the freedom to choose better, more affordable health insurance. This deal would involve codifying Trump's rules on Association Health Plans (AHPs) and Short-Term Limited-Duration Insurance (STLDI) and allowing individuals and employers to purchase health plans available in US territories.

Key Takeaways:

  • The only defensible deal Republicans could strike on extending Obamacare subsidies for the wealthy is one that frees people to choose better, more affordable health insurance.
  • Trump's rules on AHPs and STLDI enabled most Obamacare enrollees to obtain comprehensive coverage at premiums as much as 60 percent below the lowest-price Obamacare plans.
  • The CBO found that these rules resulted in lower deductibles or wider provider networks, making health plans higher quality than Obamacare plans.
  • Freeing people from Obamacare regulations has a bipartisan pedigree, as recognized by Barack Obama himself in 2014 when he exempted US territories from Obamacare's health insurance regulations.
  • Residents of Puerto Rico and the US Virgin Islands have had more freedom to choose their health insurance for over a decade, with many able to buy coverage at a lower premium from the same insurer.
  • A deal that trades a temporary extension of subsidies for the wealthy for a permanent restoration of the freedom to choose better, more affordable health insurance would be a good and impressive one.

Statistics:

  • 60%: The premium reduction for Obamacare enrollees who obtained comprehensive coverage through Trump's rules on AHPs and STLDI (CBO)
  • 10 years: The duration of time that residents of Puerto Rico and the US Virgin Islands have had more freedom to choose their health insurance
  • Unknown: The number of people who could gain access to better, more affordable health insurance through the proposed deal

Sources:

  • Michael F. Cannon, "The Only Defensible Obamacare Deal," National Review, 2025
  • Congressional Budget Office, "New Rules for AHPs and STLDIs" (54915), 2019
  • Barack Obama, 2014 ( Obama's administration exempted US territories from Obamacare's health insurance regulations)

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