Recent news has highlighted just how important and popular the Affordable Care Act has been, but its fate under a Trump administration and Republican Congress is uncertain. Congressional Republicans have voted repeatedly to repeal the ACA, but now that they actually have a shot at doing that, journalists and commentators are focusing on how hard it will be to preserve the provisions voters like and politicians vow to keep – let alone the gains in insurance coverage and financial stability.

Between the law’s passage in 2010 and early 2016, an estimated 20 million people gained health insurance coverage thanks to the ACA. Rates of uninsurance have declined; Texas, which had the highest rate, saw the percentage of residents without insurance drop 30%. A Commonwealth Fund survey that asked adults with new insurance to rate their plans found 77% of those with marketplace plans and 88% with new Medicaid coverage were very or somewhat satisfied. Over the past five years, with the combination of the ACA and an improving job market, fewer people have struggled to pay medical bills. NPR’s Alison Kodjak reports:

A report from the National Center for Health Statistics released Wednesday shows that the number of people whose families are struggling to pay medical bills fell by 22 percent, or 13 million people, in the past five years.

And that’s good news, according to consumer and health policy advocates.

“The effect on families is profound,” says Lynn Quincy, director of the Healthcare Value Hub at the Consumers Union. “Health care costs are a top financial concern for families, far above other financial concerns.”

Quincy says the No. 1 determinant of whether people can pay medical bills is whether they have insurance.

“The fact that this report shows it’s getting easier, it seems like we should lay a good part of this at the door of the ACA,” she says.

This is not to say that the ACA has solved everyone’s problems. Premiums and deductibles remain unaffordable for many, many insurers selling in marketplaces (also called exchanges) have lost money, and some counties have only one insurer offering marketplace plans. But so far, Republicans have not proposed a plan that would reliably improve this situation for anyone outside of the healthiest twentysomethings. Jonathan Chait explains in the Daily Intelligencer:

Obamacare is more market-based than traditional employer insurance. Unlike insurance provided by most employers, which charges every employee the same rate, the exchanges are allowed to charge old people up to three times as much as young people. The premiums are paid up front, and since people tend to shop for the cheapest premiums, they often get insurance with high deductibles.

It’s not unreasonable to call this insurance “crappy.” But not only is crappy insurance better than no insurance, all the Republican plans to replace Obamacare share the common trait that they will give people crappier insurance. Republicans plans all involve higher deductibles and greater discrimination against the old and sick than exchange plans allow. They would make the exchanges even less like the employer-based insurance that people like.

Making workable healthcare policy requires understanding how insurance markets work. Any proposal will require tradeoffs, and any politician who suggests everyone can get what they want for less money is either ill-informed or not being entirely forthcoming.

Facing the Realities of Insurance Markets

MIT economics professor Jonathan Gruber, who consulted with the Obama administration and Congress on the ACA, explains the core difficulty Republicans face in trying to replace the ACA:

It is essentially impossible for a Republican President and Congress to pass any plan that does not strip away the core insurance gains and financial protections provided by the ACA.

To understand why, it is important to return to the reasons that the ACA itself is so complicated. This complication arose because the ACA was designed to maximize the financial protection provided to Americans while minimizing the disruption to the existing insurance system.

To do so, the ACA set up a “three legged stool”: banning discrimination by insurance companies; creating an individual mandate to bring the healthy into the insurance pool; and providing subsidies to make health insurance affordable.

The problem Republicans face is that the first leg is highly popular, the second leg is unpopular, and the third leg involves federal spending which the Republicans would rather direct to tax cuts for the wealthy.

We need the individual mandate to ensure that younger, healthier people buy insurance coverage; if they don’t, premiums will grow sharply. Gruber points out that New York’s individual insurance market collapsed because, in the absence of a mandate to buy coverage, prices kept rising until very few people were left in the market. He urges that we make sure any plan to replace the ACA “factually addresses” four concerns:

• How will they protect against insurance discrimination?
• How will they replace the individual mandate?
• How will they make insurance affordable?
• How will they continue to bolster employer-sponsored insurance?

None of the Republican proposals I’ve seen can answer these questions satisfactorily.

Price’s Plan

Now that Donald Trump has selected Tom Price, a former orthopedic surgeon and current US Representative from Georgia, to head the Department of Health and Human Services, the proposal Price authored seems like a potential blueprint for efforts to replace the ACA.  “Young, healthy and wealthy people may do quite well under this vision of health care reform,” Larry Levitt, a senior vice president at the nonpartisan Kaiser Family Foundation, told POLITICO. “But the people who are older and poorer and sicker could do a lot worse.”

Vox’s Sarah Kliff has a detailed breakdown of Price’s Empowering Patient First Act, and it’s an alarming read for anyone who wants low-income families to have access to high-quality health insurance. To begin with, Price’s plan would repeal the ACA’s Medicaid expansion, which brought coverage to 10 million people who previously lacked it.

Under the ACA, people with incomes of up to 400% of the federal poverty level who buy policies in state marketplaces can receive subsidies that are designed to make these plans affordable. (Not everyone finds them to actually be affordable, but the law at least moves in that direction.) That affordability is important not just for the purchasers of the plans, but for the insurers, who need enrollee groups large enough to spread the risk. Price’s plan would replace these income-based subsidies with tax credits based on age, ranging from $900 for children under 18 to $3,000 for those over age 50. Kliff comments:

This means that that Bill Gates would qualify for the largest tax credit simply because he is 61 years old. Under the Empowering Patients bill, Gates’s net worth of $83 billion — presumably enough to purchase health coverage — would do nothing to disqualify him. Under Obamacare, he gets no help.

Conversely, a 23-year-old with little income and health problems gets minimal help under Price’s plan — despite the fact that he needs support much more than Gates does.

And these credits wouldn’t go especially far toward purchasing comprehensive coverage. I looked at how much a plan for a 55-year-old would cost where I live, in Washington, DC. The cheapest option was $8,316, and that works out to $443 per month after the Price tax credit — a hefty fee for a poor, older enrollee.

Price’s proposal does allow for the existence of cheaper plans, because he would eliminate the requirement that plans cover essential health benefits, which include prescription drugs and maternity care. He’d also remove the limits on how much of a difference there can be between what a plan charges young and old enrollees. Under the ACA, insurers can only charge their oldest customers three times what they charge their youngest ones. Without this requirement, younger people could see lower costs for insurance plans (provided they don’t need maternity care or other benefits left out of low-cost policies), but premiums would quickly become out of reach for much of the 55+ age group.

There’s a lot more to Price’s plan, and those who have the stomach for it should read Kliff’s whole piece. In summary, it would be great for a certain slice of the population, but leave many more uninsured or without the kind of coverage they need. Those who are already relatively fortunate (in terms of health, income, or both) would benefit, while the poor and sick would struggle.

Politics

Many politicians campaigned on Obamacare repeal, and it will soon be time for them to fulfill their campaign promises. One idea that’s gained traction is “repeal and delay” – passing a law that repeals the ACA but leaving it in place for three years while legislators decide what to replace it with. But Robert Laszewski, a health policy consultant who’s been critical of the ACA, tells Vox’s Sarah Kliff that such a plan would likely doom marketplace insurance:

… Republicans are being awfully naive. They seem to be ignoring the risks in the transition period, particularly because they need insurance companies to provide insurance during the transition.

Unless we have some miracle, and the exchanges become profitable, why would they stay around for two years? I think Republicans are overlooking this.

… The problem is when you have an insurance market and the new administration declares it DOA, it will go into death throes. It will be a death spiral. The Trump administration will have put it in a death spiral. The only way to fix that is if you subsidize the market. If you just subsidize the consumers, that doesn’t do any good if you don’t subsidize the carriers.

The way to prevent such a death spiral, Laszewski explains, is to subsidize the insurers. The law included some payments to insurers to stabilize markets in the early years, but Republicans derided them as “a bailout to insurance companies.”

The Hill’s Peter Sullivan reports that Republican Congressional staffers are recognizing the problem and talking to insurers about ways to mitigate it. “They want to pump money back in to the insurers without appearing like they’re giving them a handout or bailing them out,” one anonymous Republican lobbyist explained.

Meanwhile, the Kaiser Family Foundation has released the results of a poll conducted a week after the election. They found less support for complete repeal of the ACA than they did before the vote. Compared to October, fewer Republicans in November wanted to see the law repealed (52%, down from 69%). Among those who expressed a desire for repeal in November, 38% changed their opinion after hearing that ACA repeal would mean insurers could once again deny coverage to those with pre-existing conditions.

People may not be thrilled with the Affordable Care Act, but it brought health insurance coverage to millions of people who didn’t have it, and made it far less likely that someone who had insurance would be unable to get care due to essential services being left out of a plan, lifetime coverage limits, or lack of coverage for pre-existing conditions. I hope Republicans in Congress will worry less about being accused of bailing out insurers and more about healthcare for those who are less fortunate, but no less deserving of the chance to live a healthy life.