Fixing the ACA is not hard. If you want to fix the ACA.


​I wrote earlier that the Republicans’ new health care proposal is an immoral tax cut gambit and little more. Which is not shocking, because it seems fairly clear to me that the Republicans have no interest in fixing the problems with the Affordable Care Act specifically or doing anything to help more people get health insurance in general. They simply want to cut taxes, almost exclusively for the wealthy, and to claim that they ended Obamacare as a matter of politics. 

This should not be a controversial point. Despite the talking points about making a “better” health care system or covering more people, the simple, undeniable fact of a government-assisted health care scheme is that the less money the government spends on it, the fewer people will have coverage. Sure, there can and should be arguments about how money is spent, or whether it’s all being spent efficiently, but that’s tinkering at the edges. If you want to help more people have or purchase a thing, you have to pay for it or otherwise incentivize its purchase in a real way. Slashes to those payments and incentives will, by economic necessity, cut the number of people purchasing the thing. This is an immutable tenet of economics. The current Republican plan cuts money put toward health care coverage and guts or eliminates incentives for people to purchase it in myriad ways and will, without question, cut the number of people who have health care. 

There’s another option, of course: advancing the argument that government has no business helping people get health insurance or health care at all. I don’t subscribe to it — I think it’s a moral and ethical imperative for a wealthy and advanced society to care for its people — but it’s a philosophically consistent position for a certain sort of person. This sort of person. For those people who do not subscribe to it — or who at least pretend not to, like every Republican lawmaker who claims to want to “fix” or “replace” the Affordable Care Act — basic intellectual coherence demands that they admit that the proposed bill makes things worse, not better.

They can’t do that, though, because they have determined, likely correctly, that it is politically untenable for them to do so. People want health care. They even like the ACA on balance, at least when it’s not being referred to as “Obamacare,” which creates a visceral, negative reaction. And they do not want their health care coverage taken away. As such, Republicans must appear to care about people getting health care. They must create the illusion that no one is going to lose their coverage until after the next election, which is exactly what the proposed law does via delaying most impacts until 2019. But they cannot simply come out and say that they want fewer people covered, insurance companies protected and taxes cut for the wealthy. Even if that’s exactly what is happening. 

How might this all play out if they were not invested in creating this illusion? How would it look if lawmakers actually did want to fix the problems in the ACA — and there are problems — and make it so that more people would have insurance coverage rather than just slash taxes?

Many of you may believe such a thing is fantasy and that if there were easy fixes to the ACA they would’ve been done already. That’s simply not true. Insurance markets are not new and similar problems like those faced by the ACA now have existed in the past and have been fixed in the past. Indeed, the last time it happened was a short time ago. And it was fixed by Republicans. 

The fundamental problem with the ACA at the moment is that premiums are rising dramatically and insurers are dropping out of the market, giving subscribers fewer options. These things are related, of course, as basic economics dictate that fewer providers of a good, in the face of consistent demand, will lead to higher prices. 

Why are the insurers dropping out and the prices rising? Because the number of enrollees, the type of enrollees and the costs of providing those enrollees health care are not what insurers expected. A big problem is that the ACA marketplace plans attracted more older people than the Obama administration projected and older people simply cost more to insure for obvious reasons. Another one is that the ACA anticipated that states would expand their Medicaid programs with the federal funds it provided. A lot of governors refused to do this for political reasons. As a result, in those states, poorer and sicker people who would otherwise be Medicaid-eligible were forced into marketplace plans. It’s also the case that, despite a mandate for everyone to get insurance, the incentives for young, healthy people to buy more policies aren’t as strong as they could be. 

Insurance is not super complicated, economically speaking. It’s all a matter of group liability and shared risk. The healthy people help pay for the sick people. If insurers attract too few consumers attract too few healthy people and too many sick ones, costs outstrip premiums. When that happens insurance companies exit the market. When they exit the market the the costs go up for consumers and the choices become fewer. Over time, people just stop buying insurance altogether, exacerbating the problem.

As I said, we’ve seen this problem before. We saw it with Medicare. Specifically, the Medicare Advantage program, which is the private plan version of Medicare. In the late 1990s and early 2000s insurers dropped out of the program, which was then called “Medicare+Choice,” because premiums and government subsidies to premiums weren’t keeping up with costs. With fewer providers, premiums went up and participants dropped out, just like we’re seeing with the ACA now.

So what did President Bush and the GOP-controlled Congress do? They passed the 2003 Medicare Modernization Act. That law did a lot of things — some of them bad — but one thing it certainly did was increase the subsidies to policyholders and insurers, ratcheting up the financial incentives for the former to obtain insurance and the latter to stay in the market. It also provided for an aggressive marketing and awareness campaign aimed at signing up as many people as possible which, again, increased the size of the pool of insured people, which is a good thing for insured people. It’s also worth noting that old line Medicare — a public option of straight government-supplied health insurance — remained. That gave people more choices and provided more competition, which is good for consumers. 

Quite simply, the Medicare Modernization Act paid more more money in order to obtain more of a good. Just like anyone else would do for any other good. The result: more people got coverage, costs came down and the market stabilized. Just as any freshman economics student could predict. 

There is no reason these lessons — and basic economic laws — could not be applied to the ACA. There is no reason not to subsidize policies more. There is no reason not to find ways to incentivize consumers to purchase more policies and insurers to provide more. I’d add that there is no reason not to offer a public healthcare option like straight Medicare for everyone, but that’s another essay. The point is that there are ways to address the problems with the ACA as it’s currently constructed that will insure more people and bring costs down for them. 

Will it cost the government more? Sure it will. But I’m told by the supporters of the new health care bill that they want more coverage and better coverage first and foremost. I’m told that the new bill isn’t about cutting taxes, but about improving health care. I’m told that they agree with the nation as a whole that health care and its costs are one of the most important problems in America today. 

Well, is it? If it is, you have a road map on how to do what you claim you want to do, Republicans. And you’ve done it before. The only reason you won’t use it is if — heaven forbid — you’re not being genuine about all of this and, in reality, all you care about are the tax cuts and claiming to voters in the 2018 Republican primary that, dammit, you stuck it to Barack Hussein Obama.

Craig Calcaterra

Craig is the national baseball writer for NBCSports.com. He writes about things other than sports at Craigcalcaterra.com. He lives in New Albany, Ohio with his wife, two kids, and many cats.