Isabel Diaz Tinoco, left, and Jose Luis Tinoco speak with Otto Hernandez, an insurance agent, as they shop for insurance under the Affordable Care Act in Miami. (Joe Raedle/Getty Images)

The Republican proposal to strike the Affordable Care Act's least popular provision, the requirement that people maintain health coverage or pay a fine, could bring an immediate political victory — but would backfire on upper-middle-class people who buy individual insurance and pay full price for their plans, health policy specialists said.

“The market is stable, but you need to define 'stable.' 'Stable' is the insurance companies ramming the rates to holy hell,” said Robert Laszewski, president of Health Policy and Strategy Associates. “That's a catastrophically terrible market. This is a screwed-up market, to the 16th power. But it can continue this way, indefinitely. So, therefore, it's stable."

In the near term, zeroing out the penalty for not having insurance would provide relief to the roughly 6.5 million people who paid a fine in the tax year 2015, while retaining the law's more popular elements: Insurers wouldn't be able to deny people with preexisting conditions coverage, the federal subsidies to help pay premiums would continue, and the Medicaid expansion would remain in place.

That means Republicans may have finally found a politically feasible way to undermine the Affordable Care Act, after other attempts sank amid consumer and industry concerns about people getting kicked off health coverage.

Repealing the mandate would probably be popular in the short term. A new Kaiser Family Foundation poll found that 55 percent of people supported eliminating the mandate. Meanwhile, insurers, hospitals and doctors' groups have warned political leaders that there will be serious consequences to discontinuing the requirement.

“If you look at polling data, this is the least popular part of the ACA. Hospitals will be mad at you, but individual people will not be," said Craig Garthwaite, associate professor of strategy at Northwestern's Kellogg School of Management.

In the Kaiser poll, popular opinion shifted against repealing the mandate when people were told about the possible repercussions: 13 million fewer people would be insured in 2027 and premiums would rise an additional 10 percent most years.

But Robert Graboyes, a senior research fellow at the Mercatus Center at George Mason University, pointed out that premiums have already been rising.

“There’s certainly an argument that says if you remove the mandate and leave the other [parts of the law] in place, you may be creating a very unstable market environment; the question is whether the environment is already unstable given the fact that the mandate, as created in the law, was extraordinarily weak," Graboyes said.

 

Over the long term, the federal government would be on the hook for increased premiums for the 8.7 million Americans who qualify for premium tax credits from the federal government — with incomes of up to about $98,000 for a family of four for next year. People who receive that assistance are limited to paying a percentage of their income toward their premiums, and the government pays the rest.

“The benefits of the ACA could continue, so long as the federal government is willing to keep opening its wallet, for increasing premium subsidies," said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “At some point, that doesn't seem sustainable."

It's the 6.7 million Americans who buy plans that comply with the Affordable Care Act without government assistance who will pay the full cost of premium increases triggered by the lack of a mandate.

“These are people who do have a good understanding of their place in the economy, and they do have a good understanding of the need for health insurance in particular — because life is uncertain, and things happen. They know all these things, and yet they are the ones who are going to be most penalized by this policy change," said Joseph Antos, a health policy expert at the American Enterprise Institute.

President Trump's recent executive order directs the government to create rules for short-term plans that wouldn't have to comply with the Affordable Care Act. That could bring relief in the form of cheaper plans that didn't cover pregnancy, mental health or substance abuse and could deny coverage to people with preexisting conditions.

That coverage might appeal to people who don't receive subsidies and are healthy, who would always have the option of buying the full coverage of the ACA plans if they needed more comprehensive coverage.

The problem is that if healthy people flocked to the much cheaper short-term plans and sick people to the Affordable Care Act plans, the ACA premiums would continue to rise — meaning that people who found themselves needing more comprehensive health coverage could find themselves priced out. People who receive subsidies, on the other hand, would be protected.

“What they will have created is a system that will work only when you’re healthy, and will not work when you’re unsubsidized and sick," Laszewski said. “If you’re middle class and sick, it’s a disaster — and who is Trump’s base? Who told Trump to fix this? He’s wrecked the system even more for the people who asked him to fix it, but in the short term they won’t realize it."

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