“All of my employees are having a tremendous problem with Obamacare,” Donald Trump said today, which is odd because under the law, Trump should be providing health coverage to his employees, at least the full-time ones. That means that the actual problems with the Affordable Care Act don’t affect them.
But it’s fair to say that the Republican presidential nominee is not the only one laboring under misconceptions about what the ACA is, how it works, what its genuine problems are, and how they might be fixed. In fact, most people don’t understand the law, and given how complicated the topic of health insurance and health policy is, you can’t blame them. So I’m going to try to offer a little context and perspective on the latest news about the ACA, in an attempt to get us all on the same page.
As you may have heard, the Obama administration announced yesterday that premiums for certain plans on the ACA exchanges will rise in 2017 by an average of 25 percent. This is a serious problem, and in a moment I’m going to talk about how it can be addressed. But before we get to that, it’s important to understand that almost everything you’ll hear about this news from Republicans is either completely false or misleading.
They want everyone to believe two things: First, that the administration just announced that premiums — your premiums, everybody’s premiums — will rise by 25 percent. Second, that this is proof that the ACA is a disaster and must be repealed. Both those ideas are false.
Here are some key things to understand:
This 25 percent average premium increase only applies to fewer than 2 million Americans. If you have employer-sponsored coverage, this isn’t about you. If you have Medicare or Medicaid, this isn’t about you. If you got your insurance on the exchanges but your income was low enough to qualify you for subsidies, this isn’t about you. It only concerns those people who get individual coverage on the exchanges but don’t qualify for subsidies — 15 percent of those on the exchanges. According to the government’s figures, that’s fewer than 2 million people, or about one half of one percent of the American population.
The exchanges are only one part of the ACA. The ACA’s supporters often point out all the good things that the law includes, and for their part Republicans will try to assure people that they support those things too. But one of the ironies in this debate is that because everyone says they’re in favor of a provision like the ACA’s ban on insurance companies denying coverage because of pre-existing conditions, there’s no controversy or argument about it, and it gets ignored. As Michael Grunwald recently observed, “The perks of Obamacare — insurance protections for Americans with pre-existing conditions, a ban on insurer caps that limited payouts to expensive patients, delivery reforms that have helped produce the slowest cost growth in half a century — have been mostly uncontroversial and undiscussed.”
But if Republicans were to succeed in their goal of repealing the law, all that stuff would disappear too, and we’d be back where we started — not to mention the fact that 20 million Americans would lose their coverage.
We can address this problem if we’re willing to. The exchanges are not working as well as we had hoped, but there are changes we could make that would bring more insurers in and restrain premiums. This morning I asked Paul Starr of the American Prospect, one of the country’s foremost academic experts on health policy, what kind of changes would help bring down premiums on the exchanges. He offered this list:
- Require all insurers who want to sell in the individual insurance market to offer their plans through the exchange, so they couldn’t cherry-pick individuals outside the exchange (this is an idea championed by Henry Aaron of the Brookings Institution).
- Reduce the waiting period for those on disability insurance to get Medicare coverage from two years to six months to move some of the very high-cost enrollees out of the individual-market pool.
- Require any insurer that wants to offer a Medicare Advantage plan in an area also to offer a plan in the marketplace for under-65 enrollees.
- Have the federal exchange adopt the procedures used by California in actively bargaining with plans instead of acting as a passive clearinghouses.
- Create a public option for those aged 55-64 clearly identified as an early buy-in to Medicare.
- Create a second federally run public option for enrollees from 18 to 54.
- Restore the risk corridor and reinsurance provisions that have expired that were intended to protect exchange plans against adverse selection.
These kinds of changes are meant to expand the risk pool to include both healthy and sick people, keep as many insurers in each marketplace as possible, and further increase competition via a public option — all of which might help to keep premiums down and make the exchanges work better. You might disagree with some of them, and some might have a greater effect than others. But the point is, the problems the exchanges are having aren’t so intractable that we just have the throw up our hands and toss the whole thing in the trash.
And every state is having a different experience — in some, premiums are going up dramatically, while in others premiums are staying the same or even going down. Might it be worth figuring out what’s working and what isn’t, and having what we learn guide our next moves? Liberal health policy wonks have been thinking about these issues for a while, and they have plenty of ideas.
But — and this is vitally important — congressional Republicans refuse to entertain any changes or reforms to the ACA. They say, “Isn’t it awful that exchange premiums are going up!” and then when Democrats say, “Okay, why don’t we do something about that?” their response is, “Nope, we can’t do anything about it, it’s either repeal the entire law or nothing.”
Some argue that Democrats created this mess, so why should Republicans help them clean it up? But here’s the problem with that argument. Republicans also like to claim they have the same goals that the law had: Get more people covered, bring costs down, make coverage secure, and so on. The ACA is doing all those things — the uninsured rate is at an all-time low, total health spending is trillions of dollars less than had been projected before the law was passed, and insurance companies can’t deny you coverage. Yet the replacement plans Republicans have offered would at best do a fraction of what the ACA is doing. So if they don’t want to participate in fixing the ACA, that simply means they don’t actually want to solve the problems they claim to want to solve.
Nothing demonstrates how unserious Republicans are about health care policy more clearly than this does. Their preferred reform ideas — such as letting insurers sell across state lines — are positively miniscule in comparison to the challenges the health care system presents. If they were being honest, they’d admit that their real goal is to get the government out of the business of offering or even guaranteeing coverage, and that they don’t really care how many people are uninsured. That’s not to mention the fact that they refuse to grapple with the massive destruction that repealing the ACA would cause. In fact, at this point, repealing the ACA could be more disruptive than it was to implement it in the first place, because so many changes have been made throughout the health care system and so many new people are now insured.
So let’s not forget that when news of some problem with the ACA emerges, as it did yesterday, the Republican position is always the same: This is a terrible thing, and we will fight to our last breath to stop Democrats from fixing it. Which means that the only way that the shortcomings in the ACA can be addressed — just as every major law has been tweaked in the years after it passed, including Social Security and Medicare — is to get a Democratic president and a Democratic Congress who are willing to do it.