In order to gain a mandate from the voters to reform our health-care system in a conservative direction, we will need to put forth a concrete agenda that shows how free-market reforms will reduce the cost of insurance, and why Obamacare will increase those costs. We will have to accept that repealing Obamacare is no longer possible, and instead step back and look at the health-care system as a whole and ask: If we were designing a health-reform agenda from scratch, what would it look like? …

“Step One of this new strategy would be to improve the market orientation of Obamacare’s insurance exchanges. The exchanges are larded with excessive mandates and regulations that will drive up the cost of their insurance products. Republicans in Congress should require the Department of Health and Human Services to reduce this regulatory burden.” …

“Step Two would be to move Medicare patients into Obamacare’s exchanges. For example, Congress could agree to raise Medicare’s eligibility age by three months every year for the foreseeable future. In effect, over time, this would gradually introduce premium-support-style reforms into the retiree population, without requiring Congress to get bogged down in complicated reform legislation.”

Step Three involves repealing or modifying Obamacare’s employer mandate, if it can be done in a deficit-neutral fashion, so that more individuals purchase insurance on their own instead of through their employers. Step Four involves migrating most of the Medicaid population onto the exchanges, something that will reduce the large disincentive for upward mobility that Medicaid now imposes on the poor.