Obamacare has both a policy problem and a political problem, and the two problems are now caught in a predictable feedback loop which ensures that the law not only continues to break down, but that it will be difficult or impossible to fix.
The health law's policy problem is plain for all to see: Premiums for individual insurance sold through the law's exchanges are rising rapidly, enrollment is far lower than initially expected, and insurers are dropping out of the system. These effects are directly linked. States have begun to approve insurer requests for premium hikes, and in places such as Kentucky, Georgia, Virginia, and Mississippi, insurers are receiving permission for double-digit increases. As The Wall Street Journal reported last week, regulators fear that if they do not approve these rates, insurers will simply drop out of the exchange business entirely. In Tennessee, two of the three insurers in the exchanges were allowed to refile their rate requests, according to the state's insurance commissioner, out of concern that otherwise they would exit the market entirely. These hikes are not arbitrary or over the top. The state's actuaries have said they are justified; they reflect the cost of covering claims to beneficiaries.
Several major insurers, of course, have already substantially scaled back their participation in the exchanges, leading to a situation in which a third of counties in the U.S. will have just one insurance provider operating through the exchange, a significant increase from last year. The Obama administration released a rather defensive-seeming analysis last week finding that premiums wouldn't rise much for most people buying through the exchanges because the subsidies will rise with the price of coverage, but that simply means that taxpayers will pick up the rising cost of coverage. And that provides only temporary relief. The provision that protects health law beneficiaries from hikes expires starting in 2019. In addition, the administration seems to be backing away from the promise that President Obama made repeatedly when advertising the law that "if you like your doctor, you can keep your doctor," having removed language to that effect from the federally run health exchange portal.
In any case, experts—even some who generally favor the law and its goals—are starting to question the stability of the exchanges. The current problems facing the exchanges "threaten the future stability of these markets and will require serious policy solutions to address," Caroline Pearson, a senior vice president at health consulting firm Avalere, told Stat News. Uwe Reinhardt, a prominent health economist at Princeton University, warned this week that the exchanges could implode. "We all know about the death spiral that actuaries worry about," he said in a recent interview with Vox, "and I think what you're seeing now is a mild version of that. These things accelerate, as premiums keep rising."
That is the essence of Obamacare's policy problem (or, one could argue, problems): It is not working as promised or intended, and, even if it does not totally melt down, it is not, on its current trajectory, likely to improve.
Obamacare's political problem, meanwhile, is related to its policy problem: There is nothing close to consensus on how to fix the law's problems, or whether to even try.
Thus far, the political dynamic around the law has been almost entirely binary, with Republicans pushing for repeal and Democrats defending its coverage gains. Some tweaks have been made at the margins, mostly small changes that further destabilize the law's policy scheme in order to bolster it politically (the Obama administration's decision to grandfather in many plans in order to keep its promise that those who like their plans can keep their plans, for example). Health policy wonks on the right and left have batted about various reform schemes, of course, offering various plans to fix, expand, and totally upend the law—sometimes only to put many of its primary elements right back in place.
But at the national political level, there has been little meaningful discussion of how to modify the law; instead, the debate has focused on the question of whether or not the law should even exist. More than six years after Obamacare became law, there is still no consensus on this question. In part that's because, even though the law has survived legal challenges and technical meltdowns, covering millions in the process, it has also suffered a persistent string of failures and frustrations, leaving many to continue questioning whether or not it was ever really a good idea, long after its passage. More adults continue to hold an unfavorable view of the law than a favorable one.
Because this existential question has not yet been resolved, the political dynamic has remained unchanged. And what that means is that fixes or reforms of any kind lack the requisite political support to pass. In recent months, Democrats have settled on support for a "public option"—a government run health insurance plan that would compete alongside private insurers in the exchanges. President Obama endorsed the idea in an article for the Journal of the American Medical Association, while Clinton came out in favor of it too, though neither has devoted significant energy to selling the idea publicly. After years of promises, meanwhile, Republicans finally released a pseudo-plan to replace the law, a Frankenstein-sketch of reanimated ideas, many of which are already included in Obamacare in some other form. Needless to say, the current Republican standard-bearer, Donald Trump, has not exactly devoted energy to making the case for this plan.
In my view, the policy cases for both reforms are weak at best: Obamacare already included a substitute for the public option in the form of a series of government-backed nonprofit co-ops, the majority of which have already failed. The Republican plan is just reheated GOP health policy leftovers, designed in a way that might be even worse than Obamacare in some respects.
But in some sense, the policy cases, for or against, are beside the point. Because in any political environment that requires bipartisan support—the likely case, unless one party manages to secure both chambers of Congress and the presidency in the upcoming election—it is almost impossible to imagine any consensus.
Democrats and supporters of the law will, of course, say that this is entirely the fault of intransigent Republicans for refusing to rally behind a law that is providing coverage to millions. But that's a difficult case to make given the consistent weakness of public support for the law, and even more difficult as it looks to be unraveling before our eyes. It is essentially an argument that Republicans must now rally around a law that they opposed on the grounds that it would fail, and that is now failing, by empowering the same people who promised that the law would not fail to fix it.
Even if you accept the argument that the law could be fixed if only Republicans would come around, what it amounts to is an admission of a design flaw built into the law's joint policy-political scheme: Democrats passed a major law with multiple potential points of failure that could only be addressed with bipartisan support—but they passed it over the strenuous unified objections of the other party.
Republicans are not blameless either. As a party and political institution, the GOP wasted years both before and after the law essentially declining to make a positive case for any kind of health policy at all, leaving open the door for Democrats to pass the reform that they did. The GOP's total opposition to the law, combined with a lack of clearly articulated alternatives, has rendered the party less trustworthy on the issue.
And so the fate of the law, and of national health care policy more broadly, is stuck at an impasse: If the law's exchanges continue on their current wobbly trajectory, they will continue to break down, perhaps collapsing completely or perhaps not, but in any case functioning less and less well over time. But barring an unlikely electoral majority, the political dynamic surrounding the law is likely to block any fix or wholesale do-over. In the meantime, the ongoing policy failures will continue to harden the political dynamic, making the nation's health policy problems even harder to address. Obamacare is bad policy magnified by bad politics, and for the foreseeable future, its problems are likely to grow worse on both fronts.