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After one year, Obamacare remains just as unpopular as ever. The fight for repeal has gained ground in both Congress and the states. But repeal is only the first step in setting a new agenda on health care.

In her recently released paper ^[2], Heritage expert Nina Owcharenko explains the four steps necessary to creating lasting reform that is truly market-based and patient-centered: “Unlike Obamacare, Congress should pursue an approach to health care reform that preserves the doctor–patient relationship and cutting-edge innovation while controlling costs and expanding access to private health coverage.”

According to Owcharenko, successful reform will focus on four crucial areas:

1. Tax reform. Under the current system, individuals who receive employer-sponsored coverage receive preferential tax treatment over those shopping in the individual market. Tax policy reform is crucial to create equality within the system. Owcharenko argues ^[2], “Congress should replace the current tax treatment of health insurance with a credit that is individually based … replacing the current open-ended tax break for work-based coverage with a broader and fairer tax system for individuals. … Congress should [also] provide low-income, non-taxpaying workers with a comparable subsidy.”
2. Entitlement reform. Reform of Medicare and Medicaid, two of the nation’s most costly entitlement programs, is necessary to save our fiscal future. Moreover, transformation would ensure that they better meet the needs of their beneficiaries. Owcharenko writes ^[2] that “these programs transfer enormous power into the hands of bureaucrats to control or limit enrollees’ person health care decisions and discourage market-based efficiencies.” By switching to a system where consumers, not bureaucrats, make decisions about their own health care, Congress could put these programs on a sustainable path while providing better quality care.
3. Insurance reform. Another step to creating a market-based health care system is insurance reform. Congress can make changes to the existing system that allow interstate purchases of health insurance, remove barriers to access for hard-to-insure patients, and allow for more effective ways to pool patients. These reforms would expand coverage without disrupting the system for those it currently serves well.
4. State-based reform. No two states have the same health care reform needs. Because of this, states, not Washington, should take the lead in designing reforms that best meet the needs of their residents. According to Owcharenko ^[2], “state policymakers should pursue innovative ways to advance a consumer-based marketplace at the state level. Good state experimentation can help to identify future federal changes necessary to achieve full reform.”

Over the last year, the push back against Obamacare has shown that Americans do not want a health care system where government—rather than doctors and patients—makes the calls. To learn more about why patient-centered, market-based reforms that control costs is the right way to go, read Owcharenko’s full report here ^[2].