I wouldn't read too much into today's decision on the individual mandate for two reasons. First, the issue of the constitutionality of the individual purchase mandate is exactly where it was yesterday - in Anthony Kennedy's head. Second, because removing the individual purchase mandate does not, in itself, take us off the road to government-run health care. Obamacare is designed to decompose and result in higher insurance premiums and dropped coverage for millions. Under Obamacare, insurers won't be able to deny coverage or charge premiums based on a customer's health. The obvious incentive is for a consumer to avoid getting health insurance until after getting sick. The individual purchase mandated was designed to partially mitigate this tendency (though it was probably too weak to do so and part of a lousy plan anyway.) If the individual purchase mandate is found unconstitutional, it won't remove the keystone to Obamacare. Guaranteed issue (insurers not being able to deny coverage) and community rating (insurers not being to charge rates based on health) would still be there.
Removing the individual purchase mandate would just speed up the death spiral of the health insurance companies as employers and individuals dropped coverage until individuals got sick. And what kind of world would it be as the health insurance industry was collapsing? Premiums would rise on those dumb enough to buy insurance even as more and more insurance companies fled the industry. There would be a bitter argument about which direction to go. A system of price controls and single-payer (with some kind of supplementary system for the wealthy) might seem like the way to go in such a situation. You don't need an individual purchase mandate to get to government-run health care. Whether we have a mandate or not, conservatives don't need a strategy for getting back to the pre-Obamacare status quo. They need a strategy for getting to a reformed health care system. It won't be easy. Try reading the work of free market-oriented health care analysts.
David Goldhill in the Atlantic, Paul Howard and Stephen Parente in National Affairs and James Capretta and Thomas Miller for AEI have all come out with plans for moving the health care sector in a more free market-oriented direction. From reading all those plans, one thing that jumps out at me is the complete lack of a reformist conservative public rhetoric on health care reform. Even if the majority of the public were willing to give one hour of undivided and active attention (which it ain't), I still doubt that they would walk away from the above essays with a very clear understanding of what was being said. David Goldhill comes the closest to an accessible account but even he takes over ten thousand words to get there. The outlines of several (not wholly compatible) conservative reform agendas exist. The next step is to find ways to explain the key insights, policies and benefits of those agendas in several minute chunks that use plain English and draw from everyday experience. I know it sounds tough (it is tough!), but that is what Reagan would do.
Another concern I have with all of the above approaches is that they are all proposals for enormous system wide changes. I'm for that kind of change, but we need to recognize the practical barriers to achieving huge nationwide changes as a first step. The elected braches of the federal government have multiple veto points. It was only the combination of Democratic supermajorities and an implacable President that got Obamacare through. Getting the anti-Obamacare through will be equally tough though not impossible given enough public support (and the abolition of the filibuster.) But getting the required breadth of public support won't be at all easy. For one thing, the vast majority of the public has not yet heard of the Goldhill, Howard, Capretta, etc. proposals. As far as most of the public is concerned, the positive conservative position on health care is tort reform plus nothing. Just explaining the reformist proposals will be a huge public education effort and I'm not sure most people will like what they hear at first. Market-oriented health care reform will transform how people pay for their health care (not getting insurance from an employer and paying more routine expenses out of pocket.) If we aren't careful, we might make single-payer sound good.
That doesn't mean conservatives shouldn't try to popularize the case for national, market-oriented health care reforms. Conservative members of Congress, conservative journalists and media figures and conservative presidential candidates would do us all a huge service if they dedicated more of their time to explaining the ideas of James Capretta in accessible language. But policy progress will probably come from the federal government last and if we put all of our efforts and hopes into the Ryan-Rivlin plan, we make it more likely that we will get single-payer rather than reform.
Market-oriented health care reform, if it is to happen, will probably have to happen in the states first. The key points for supporters of market-oriented health care reform to get across is that our current system of virtually comprehensive prepayment for health care services costs you too much money without improving your access to quality health care. Goldhill's homely analogy of what would happen if you paid an insurance company for "grocery insurance", bought food where you wanted (and where most stores didn't post prices), and then faced ever rising "food premium" bills should be deployed at every opportunity. If you paid for routine health care costs out of pocket and got to keep the savings from wise spending and provider competition, you would have more money in your pocket at the end of the year, still have access to great health care and still be insured against a catastrophic health care event. But even if you explained market oriented health care reform in the best way possible, it would still be tough going. Decades of experience have made the idea that you can save money by paying out of pocket for routine medical expenses counterintuitive. People are risk averse when it comes to health care policy and nothing will convince like real world demonstration.
That is why it is so important to have concrete examples of market-oriented health care policy where going (for example) to HSA/catastrophic coverage saves real people real money while maintaining their access to quality health care. That is why I'm going to keep linking to Indiana's HSA/catastrophic health care program until a torch bearing mob marches on my home.
The important thing to keep in mind is that state-centered and federal-centered approaches to health care reform need to be complementary if we are to avoid government-run health care. If there is no national health care reform movement and no congressional Republican pressure, the Obama HHS bureaucracy will strangle state health care reforms. If there are no (or very few) state-level examples of promising market-oriented health care programs, passing a federal market-oriented health care reform becomes much more difficult if not politically impossible.