Michael Grunwald is a senior staff writer for Politico Magazine.

President Donald Trump has promised that his replacement for Obamacare will “increase access, lower costs and provide better health care,” an ambitious standard for a policy revolution in a modern industrialized nation. But in recent years, there is one country that managed to pass a reform achieving all three of those goals.

The problem for Trump and the Republican Party is that the country is the United States, and the reform was called “Obamacare.” It has well-documented flaws, but it has helped expand coverage to 20 million uninsured Americans, reduce the growth of U.S. medical costs to historic lows and start to shift the focus of the health system toward results—while also reining in the federal deficit and stabilizing Medicare’s finances.


This new baseline helps explain why the long-awaited House Republican bill to repeal and replace Obamacare is getting such brutal reviews—and why GOP leaders released it before the Congressional Budget Office could calculate how much it would cost or how many Americans it would cover. Critics on the right are trashing it as “Obamacare Lite,” while critics on the left are warning that it will throw millions of families off their insurance, jack up premiums and deductibles and finally create the insurance “death spirals” that Republicans have warned about under Obamacare. And really, both sides have a point.

That’s because health care is about choices, and Republicans who want to re-reform the system face a slew of uncomfortable policy and political trade-offs. Their repeal bill tries to duck many of those trade-offs, by preserving Obamacare’s most popular elements while ditching more controversial reforms that helped hold it together—and by punting on uncomfortable questions like how to pay for it all. There are several serious ideas in the Republican bill that could help improve Obamacare, but the overall result is an unworkable hodgepodge that might satisfy some of the GOP base’s demand for some kind of repeal bill—although judging by the initial conservative reaction, even that looks iffy—but would not achieve Trump’s stated goals.

To understand why, it helps to understand the original choices that drove Obamacare. They weren’t all popular, and some of them created losers as well as winners. But like them or not, they amounted to a coherent approach.

For starters, Obamacare imposed significant tax hikes on high-income families and investors, which financed a massive expansion of Medicaid to cover millions of lower-income Americans. Those trade-offs were fairly straightforward: Bad for the rich, good for the nonrich. The Republican bill would extend the tax hikes through 2018, irritating the GOP’s donor base, but then eliminate them with no alternative financing mechanism, irritating fiscal hawks who would prefer not to blow up the deficit. Meanwhile, the repeal bill would keep Obama’s Medicaid expansion in place until 2020, which has drawn outrage from the House Freedom Caucus, the Heritage Foundation and other conservative groups. But it would freeze the expansion after 2020, and would essentially replace the Medicaid entitlement with block grants to states, an upheaval that could scare off Republican supporters of the Medicaid expansion and violate Trump’s promise to reject Medicaid cuts.

Those trade-offs are mostly about simple redistribution, forcing Republicans to decide to what extent wealthier Americans should pay less in taxes and to what extent poorer Americans should receive less generous benefits. But Obamacare’s more complicated trade-offs involve its insurance reforms, because they involve delicate balances between young and old, healthy and sick, insurers and insured.

Obamacare included some harsh rules to force insurers to make sure their customers actually get help when they get sick, including a ban on discrimination against consumers with pre-existing conditions and an end to annual and lifetime caps that limited how much insurers would have to spend on a single patient. These rules are obviously tough on insurers but are wildly popular with consumers—and the Republican bill would leave them in place. But private insurers won’t provide insurance unless they can make money doing it, one reason Obamacare includes several provisions designed to encourage younger and healthier Americans to buy insurance they might otherwise forgo. The most controversial is the “individual mandate,” which slaps tax penalties on anyone who didn’t buy insurance. Obamacare also includes extremely generous subsidies to help Americans earning as much as four times the poverty level afford their monthly premiums.

The Republican bill would repeal the unpopular mandate, instead forcing consumers who try to reinstate their coverage after dropping it to pay much more to their insurers. The bill would also replace the Obamacare subsidies with less generous tax credits that would no longer be determined by income. But both of those changes would mean fewer young and healthy consumers buying insurance, which would mean higher premiums and deductibles, which could scare off even more young and healthy consumers, triggering the “death spirals” that Republicans have been predicting for years under Obamacare. Insurers might also abandon markets with older and sicker clienteles, another Obamacare problem that repeal could make worse. Meanwhile, the repeal bill’s efforts to help nonrich Americans afford insurance—while far more modest than Obama’s—are fueling the “Obamacare Lite” charges on the right.

These are difficult policy circles to square. If you’re going to force insurers to spend more money on their customers, either their customers or the government will probably have to pay the insurers more to make it worth their while. You can also try to reduce those payments by restraining the growth of health care costs, something Obamacare has done with astonishing success; medical cost inflation was crippling families, companies and the government at the beginning of the century, but it is now at its lowest level in decades. That has helped keep premiums and deductibles relatively stable, despite the media freakouts over significant increases in several states in 2016; the general slowdown in health-cost increases has also helped extend the estimated solvency of the Medicare trust fund by 13 years.

Obamacare has achieved some of this success through delivery reforms that are transforming the system to reward doctors and hospitals according to the value of their care rather than the volume. The repeal bill does not seem to undo those reforms, but it does not seem to expand on them significantly, either. Obamacare also aimed to cut costs with new taxes on medical devices, tanning beds and expensive health plans. But the repeal bill will kill most of those taxes, and will delay the “Cadillac tax” on expensive plans until 2025. And it shies away from additional cost controls, in part because reining in health costs means reining in the incomes of health providers, which is always a difficult political lift. An early version of the GOP repeal bill had a provision capping the tax deduction for employer-sponsored insurance, which could have been an unpopular but effective restraint on costs that also could have helped pay for reform; it didn’t make it into the final draft.

The repeal bill does include some reforms that, in isolation, could potentially improve Obamacare. It would provide states with $100 billion that they could use to expand coverage for moderate-income families, or perhaps to help insurers maintain coverage for sick customers without excessive spikes in premiums. It would also relax an Obamacare rule that prevented insurers from charging older customers more than three times what they charged younger ones; the looser standard could mean higher premiums for older consumers, but it could also help attract younger consumers, which could help keep more insurers in the program.

But the Republicans are not proposing those reforms in isolation, which is why they’ve landed with such a thud. Democrats see an assault on Obamacare. Conservative Republicans see a plan that retains the basic structure and many of the government excesses of Obamacare. Some Republicans will object that it doesn’t abolish the Medicaid expansion immediately, others that it doesn’t preserve the Medicaid expansion forever. The Trump administration has sounded supportive but noncommittal—and if the CBO declares that the House Republican plan will increase the uninsured rolls by 15 million to 20 million while increasing patient costs and destabilizing Medicare, as some health care wonks estimate, it’s easy to imagine the president declaring he never liked it.

The larger point is that health care reform is hard. Carrots that help people afford insurance and help insurers provide insurance cost money. Sticks that force people into the insurance market are despised. It was pretty remarkable that President Barack Obama got 60 senators to agree on a bill when he had 60 Democrats in the Senate; Trump has only 52 Republicans, and the Koch brothers, the Club for Growth and other conservative groups are already denouncing the repeal bill. Americans don’t normally pay much attention to the CBO, but an embarrassing score that predicts a huge rise in the uninsured and huge increases in patient costs could make this an even tougher vote.

The deeper problem for the Republicans, as a matter of policy as well as politics, is that the health care system is less dysfunctional than it was in 2010. Fewer Americans lack coverage. Costs are no longer soaring. Americans who get coverage through Medicare, Medicaid or their employers are mostly satisfied. There are still real problems in the market for Americans who don’t get covered at work or through the government, and real questions about whether insurers will stay in that market in the coming years. But that market was screwed up before Obamacare, and many of the Americans in it now receive generous subsidies through Obamacare.

Of course, Republicans have long argued that Obamacare is an epic disaster, and that repeal is necessary to alleviate the crisis no matter what the CBO has to say. That argument got a fair amount of traction when Obama was president, when repeal was a pipe dream and when Republicans didn’t have to explain what they planned to do instead. But again, health care reform is about choices, and after seven years, Americans finally have a choice between Obamacare and a Republican alternative. It’s hard to imagine a choice that would make Obamacare look better.