The current situation presents an opportunity to replace the Affordable Care Act with a more sustainable bipartisan law. But repeal must wait until a consensus is built around a replacement plan. Not doing so – starting with repeal and delay – threatens to destabilize the individual market and harm not only those who receive subsidies from the ACA, but also everyone who now purchases insurance in the individual market.
Estimates show that premiums would jump at least 20 percent and cause 4.3 million to lose health insurance as soon as next year, and that’s nothing compared to the damage that would be inflicted if a replacement plan subsequently failed to emerge. The current version of repeal through reconciliation, leaving in place the ACA’s insurance market reforms, would nearly destroy the individual market if its provisions took effect, causing 30 million people in total to lose health insurance, leaving more uninsured than before the ACA.
Fixing the ACA is important, but replacing it with a durable plan to make health coverage broadly affordable will take time and constructive bipartisan collaboration.
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Obamacare is entering a new stage. The recent announcement by United Health Care that it will stop selling insurance to individuals and families through most health insurance exchanges marks the transition. In the next stage, federal and state policy makers must decide how to use broad regulatory powers they have under the Affordable Care Act to stabilize, expand, and diversify risk pools, improve local market competition, encourage insurers to compete on product quality rather than premium alone, and promote effective risk management. In addition, insurance companies must master rate setting, plan design, and network management and effectively manage the health risk of their enrollees in order to stay profitable, and consumers must learn how to choose and use the best plan for their circumstances.
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The future of the Affordable Care Act could depend on the success of federal and state administrators in signing people up in the current open enrollment period—the last one before the 2016 election. Over 10 million people eligible for ACA coverage have yet to sign up. Retention of those already covered may be hindered by rising premiums, dissatisfaction with high deductibles or coinsurance in some plans, limited choices of providers offered by plans, or simple ignorance of the necessity to re-enroll.
The Urban Institute’s Robert D. Reischauer and Brookings Senior Fellow Alice M. Rivlin highlight three main health care issues the candidates should focus on that are likely to dominate the election debate. Republicans must form consensus around a replacement plan for the Affordable Care Act and Democrats must develop ways to improve the law. Both must focus on how to control rising health spending and how to preserve Medicare for the growing elderly population.