Obamacare Has Problems. The Senate Health Care Bill Doesn't Solve Them, Experts Say

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The Affordable Care Act isn't perfect. Even proponents of the law would agree with that.

In many parts of the country, there is only one insurer in the individual markets — and in a few, there are zero. Premiums have spiked, sending some people on the insurance exchanges hunting for new plans.

If you listen to the news, you know all of this. Particularly in the past year or so, these complaints have been at the heart of Republicans' push for repealing the Affordable Care Act, also known as Obamacare. And as senators try to scrape together enough votes to pass their own health care overhaul, these are at the heart of their pitch to the American people.

NPR asked several health care experts to tell us what they view as the biggest problems with the current health care system. Then we asked: Does the Senate bill fix them? Most of the experts we consulted (backed up by a Congressional Budget Office assessment) said that for the most part, no — the Senate bill won't solve the health care system's problems and that it, in fact, could make some of those problems worse.

Problem 1: health care costs

The biggest problem with health care in the U.S. was around long before Obamacare, several experts who spoke to NPR said.

"The fundamental problem with the health care system is health care is too expensive," said Sara Rosenbaum, a professor of health law and policy at George Washington University.

The U.S. spends around $9,450 per person, per year on health care — that is money charged by providers and insurers for services, according to data compiled by the Kaiser Family Foundation. That is around twice as much as in other rich countries.

"We spend so much more than other countries," said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation. "And while health care costs have been growing relatively modestly recently, they're still growing faster than the economy as a whole."

"These bills [from the House and Senate alike] don't even really attempt to solve that problem," he said. "This is a much narrower effort."

"Essentially they're moving the deck chairs on the Titanic," concurred Sabrina Corlette, research professor at the Center on Health Insurance Reforms at Georgetown University. "This bill does nothing on cost containment, nothing on delivery system reform, nothing on the underlying reasons that health care is so expensive in this country."

The experts tended to agree that the Affordable Care Act didn't have much success on the cost-containment front, although they disagreed on why.

"Health care spending did slow down a lot sort of during ACA implementation, but I don't think we can attribute most of that to ACA," said Caroline Pearson, senior vice president for policy and strategy at Avalere Health. "A lot of it had to do with the economy and the state of recession and sort of the hangover that that caused."

Problem 2: unstable individual markets

One of the most common criticisms of Obamacare right now is that insurers have been dropping out of individual markets set up by the health law. That leaves people in many parts of the country with only one option, and in 2018, 47 counties could have zero insurers, according to the Center for Medicare and Medicaid Services.

Opinions vary on how pressing the one-insurer problem is — "It's not ideal, but it's not catastrophic having one insurer," said Levitt. Pearson was more urgent in her warnings: "Absolutely that needs fixing. The ACA exchange markets are very fragile at this point."

Either way, it's not clear that the Senate health bill would increase stability in the individual markets.

Under current law, the Congressional Budget Office says, the markets will generally hold firm over the coming decade: "The subsidies to purchase coverage, combined with the effects of the individual mandate — which requires most individuals to obtain insurance or pay a penalty — are anticipated to cause sufficient demand for insurance by enough people, including people with low health care expenditures, for the market to be stable in most areas."

However, a "small number of people" live in places with "limited participation" by insurers. That is due in part to low profits for insurance companies, but it's also due to "uncertainty" about how health care laws might be enforced in the future — which is created by continual threats to remove the law.

The Senate bill would not necessarily make more areas more stable. The recent CBO report refers to stability in "most" places, just as it does to describe the individual marker under current health law: "Nongroup insurance markets would continue to be stable in most parts of the country."

But rural areas could have particularly unstable markets under the Republican plan, the CBO said. That is because low populations, combined with smaller subsidies, could mean few consumers. That would make exchanges in those areas less profitable.

So the difference between one law and the other isn't terribly clear in this respect.

In addition, it's foreseeable that as funding like Obamacare's cost-sharing reductions disappear, the markets will get shakier, says one expert.

"Between now and 2021, the substantial stabilization funding in the bill would be enough to calm markets even without an individual mandate," said Levitt. "After that, money then disappears and there's some grant funding to states, but that also diminishes over time. After 2021, it's very likely that insurance markets would look a lot worse under this bill than under ACA."

Problem 3: rising premiums

Premiums have climbed sharply in the Obamacare markets for a variety of reasons. The Senate bill would fix those increases, according to the CBO, but at a price. By 2020, the average premium for a benchmark plan would be 30 percent lower than it would be under Obamacare.

That sounds good, but those lower premiums wouldn't be enough to entice poorer Americans to buy insurance. "Few low-income people would purchase any plan" under this bill, the CBO wrote.

And that is because the costs would just shift elsewhere. The Senate health care plan might push premiums down for some people, but it would also push deductibles up, the CBO said: "Because nongroup insurance would pay for a smaller average share of benefits under this legislation, most people purchasing it would have higher out-of-pocket spending on health care than under current law."

That was the take of Christine Eibner, a senior economist and associate director of the Health Services Delivery Systems program at the RAND Corporation.

"It's still going to be more out-of-pocket spending relative to the ACA for people with incomes between 138 and 400 percent of the federal poverty level," she said. Those people are currently eligible for subsidies on the individual exchanges.

Nicholas Bagley, who teaches about health law at the University of Michigan, elaborated.

"By linking subsidies to these less generous plans, the GOP health care plan says, 'Yes, we're going to make sure you can purchase a plan, but the plans we're going to make sure you can purchase are going to be very high deductible plans,' " he said.

Not everyone agrees with that assessment, though. Avik Roy, president of the Foundation for Research on Equal Opportunity, has been one of the loudest proponents of the Senate's Better Care Reconciliation Act. He admits one thing he likes about Obamacare is "the degree to which it tries to expand the size of the people who try to shop for their own insurance."

The Senate bill further encourages that "economically coherent goal," he said, of "more people buying insurance on their own in a thriving, robust and stable insurance market."

He thinks the individual markets will end up pulling people's health care spending down because new age-rating rules (which make insurance cheaper for younger people relative to older people) and a change that would make marketplace plans, on average, cover less will drive younger and healthier people into the markets, pulling premiums further downward and lowering people's health spending altogether.

Problem 4: coverage

By and large, it appears coverage levels would go down under the Senate bill, according to the CBO. Under that legislation, 22 million more people would be uninsured in 2026 than under current law, the CBO said. Nearly 70 percent of that — 15 million — is attributed to Medicaid changes. Seven million fewer people would be enrolled in the exchanges in that time frame.

"There will be a lot of low-income people who won't have access to insurance, and then there will be some who won't be able to buy a plan through the exchanges," said Pearson. "Even if they can afford the premiums, if the deductible is a $6,000 deductible, then that doesn't really leave low-income people in a position to use their insurance."

That is a massive hit to coverage, and it's one of the headline numbers causing Republicans the most headaches since the CBO report's release.

Once again, however, Roy believes that the CBO is wrong. In his opinion, removing the individual mandate won't drive nearly as many people out of the market as the office says.

"There's a simple way for Republicans to highlight the CBO's mandate mania: have CBO score one version of the bill with an individual mandate, and one version without," he wrote. That would show, in his words, that "the mandate is the secret sauce driving the CBO's faulty coverage predictions."

Other, less obvious problems

Depending on whom you ask, the Republican plan is solving other problems, though — some of which are not exactly health care-centric.

"The problem it's trying to solve is the Republicans didn't like the Affordable Care Act taxes," Bagley said. The Senate bill gives "a massive tax cut, largely for the wealthiest Americans, and it finances that tax cut largely by cutting Medicaid, the program for low-income Americans," he added.

Nearly 70 percent of the tax cuts that would happen under the Senate bill would go to the top 20 percent of earners, according to the Tax Policy Center, and nearly 45 percent would go to the top 1 percent sliver of earners.

Meanwhile, another problem for many on the right is the existence of the Affordable Care Act itself. For eight years, "repeal Obamacare" has been the drumbeat of Republican candidates nationwide. The Senate bill is ostensibly a solution to this political problem, in the sense that it is billed as a "repeal" proposal.

But conservatives from David Brooks to Ann Coulter have blasted it as "Obamacare lite." They argue from two directions — Brooks that the bill wouldn't help enough people, Coulter that she wants a "one-sentence law saying there shall be a free market in health insurance" — but they both say that too much of the original Obamacare structures (subsidies, insurance exchanges) are still there.

The Senate bill isn't seeking to tackle real health care issues here with conservative solutions, Brooks elaborated, so much as it is seeking a politically palatable, half-repeal solution that can somehow amass enough Republican votes to pass.

In other words, even if Senate Majority Leader Mitch McConnell can get those votes together, he will still have to face those in his party who say that the Senate bill still won't fully repeal Obamacare.