Obamacare’s Very Stable Genius

Posted April 9, 2018 9:33 p.m. EDT

Front pages continue, understandably, to be dominated by the roughly 130,000 scandals currently afflicting the Trump administration. But polls suggest that the reek of corruption, intense as it is, isn’t likely to dominate the midterm elections. The biggest issue on voters’ minds appears, instead, to be health care.

And you know what? Voters are right. If Republicans retain control of both houses of Congress, we can safely predict that they’ll make another try at repealing Obamacare, taking health insurance away from 25 million or 30 million Americans. Why? Because their attempts to sabotage the program keep falling short, and time is running out.

I’m not saying that sabotage has been a complete failure. The Trump administration has succeeded in driving insurance premiums sharply higher — and yes, I mean “succeeded,” because that was definitely the goal.

Enrollment on the Affordable Care Act’s insurance exchanges has also declined since 2016 — with almost all the decline taking place in Trump administration-run exchanges, rather than those run by states — and the overall number of Americans without health insurance, after declining dramatically under President Barack Obama, has risen again.

But what Republicans were hoping and planning for was a “death spiral” of declining enrollment and soaring costs. And while constant claims that such a death spiral is underway have had their effect — a majority of the public believes that the exchanges are collapsing — it isn’t. In fact, the program has been remarkably stable when you bear in mind that it’s being administered by people trying to make it fail.

What’s the secret of Obamacare’s stability? The answer, although nobody will believe it, is that the people who designed the program were extremely smart. Political reality forced them to build a Rube Goldberg device, a complex scheme to achieve basically simple goals; every progressive health expert I know would have been happy to extend Medicare to everyone, but that just wasn’t going to happen. But they did manage to create a system that’s pretty robust to shocks, including the shock of a White House that wants to destroy it.

Originally, Obamacare was supposed to rest on a “three-legged stool.” Private insurers were barred from discriminating based on pre-existing conditions; individuals were required to buy insurance meeting minimum standards — the “individual mandate” — even if they were currently healthy; and subsidies were provided to make insurance affordable.

Republicans have, however, done their best to saw off one of those legs; even before they repealed the mandate, they drastically reduced outreach efforts in an attempt to discourage healthy Americans from enrolling.

The result has been that the population actually signing up for coverage is both smaller and sicker than it would otherwise have been, forcing insurers to charge higher premiums.

But that’s where the subsidies come in.

Under the ACA, the poorest Americans are covered by Medicaid, so private premiums don’t matter. Meanwhile, many of those with higher incomes — up to 400 percent of the poverty line, or more than $95,000 for a family of four — are eligible for subsidies. That’s 59 percent of the population, but because many of those with higher incomes get insurance through their employers, it’s 83 percent of those signing up on the exchanges. And here’s the thing: Those subsidies aren’t fixed. Instead, the formula sets the subsidy high enough to put a limit on how high premium payments can go as a percentage of income.

What this means is that of the 27 million Americans who have either gained coverage through the Medicaid expansion or purchased insurance on the exchanges, only about 2 million are exposed to those Trump-engineered premium hikes. That’s still a lot of people, but it’s not enough to get a death spiral going. In fact, for complicated reasons (“silver-loading” — don’t ask), after-subsidy premiums have actually gone down for many people.

And that leaves the GOP very, very frustrated.

From the beginning, Republicans hated Obamacare not because they expected it to fail, but because they feared that it would succeed, and thereby demonstrate that government actually can do things to make people’s lives better. And their nightmare is gradually coming true: Although it took a long time, the Affordable Care Act is finally becoming popular, and the public’s concern that the GOP will kill it is becoming an important political liability.

What this says to me is that if Republicans manage to hold on to Congress, they will make another all-out push to destroy the act — because they’ll know that it’s probably their last chance. Indeed, if they don’t kill Obamacare soon, the next step will probably be an enhanced program that lets Americans of all ages buy into Medicare.

So voters are right to believe that health care is very much an issue in the midterm elections. It may not be the most important thing at stake — there’s a good case to be made that the survival of American democracy is on the line. But it’s a very big deal.

Capitol Broadcasting Company's Opinion Section seeks a broad range of comments and letters to the editor. Our Comments beside each opinion column offer the opportunity to engage in a dialogue about this article.

In addition, we invite you to write a letter to the editor about this or any other opinion articles. Here are some tips on submissions >> SUBMIT A LETTER TO THE EDITOR