A conservative alternative to ObamaCare

The outlines of such reforms have been apparent for years. The key is to enable all Americans to purchase coverage and to approach health care as consumers: with an interest in quality and an eye on cost.

The first step of a plan to replace ObamaCare should be a flat and universal tax benefit for coverage. Today’s tax exclusion for employer-provided health coverage should be capped so that people would not get a bigger tax break by buying more extensive and expensive insurance. The result would be to make employees more cost-conscious; and competition for their favor would make insurance cheaper.

That tax break would also be available—ideally as a refundable credit sufficient at least for the purchase of catastrophic coverage—to people who do not have access to employer coverage. This would enable people who now choose not to buy insurance to get catastrophic coverage with no premium costs. It also would give those who want more-comprehensive coverage in the individual market the same advantage that people with employer plans get.

Medicaid could be converted into a means-based addition to that credit, allowing the poor to buy into the same insurance market as more affluent people—and so give them access to better health care than they can get now.