WASHINGTON — Nearly everything people most dislike about the current health care law would be made worse by the Senate Republicans’ effort to repeal it. And just about everything people like about the law would be unraveled.

This paradox helps explain why Republicans are foundering in their seven-year effort to undo the Affordable Care Act, and why for the first time since it was enacted under President Barack Obama, the law is finally popular.

High premium costs for policies offered in the state marketplaces, known as exchanges, and lack of competition among insurers in rural areas generate the most public complaints, and undergird the GOP’s call for the law’s repeal. But a few fixes, long recommended by policy analysts, could remedy these.

Such fixes could also form the basis of a bipartisan alternative should the attempt by the Republican majority in the Senate to replace the Affordable Care Act fail. Senate Minority Leader Chuck Schumer of New York offered to help forge such a deal last week.

Democrats have not had a voice in crafting the Senate bill, which Senate Majority Leader Mitch McConnell drafted in secrecy. But given a chance, they would probably address some of the problems even they see with the Affordable Care Act. Chief among them are the high premiums middle-class workers face when trying to buy insurance on the individual market.

The coverage is expensive, and for many out of reach, in part because no federal assistance is available for people who earn 400 percent of the poverty level, or $80,640 for a family of three. Make $1 more than that, and subsidies disappear and premiums skyrocket. It is known as the income “cliff.”

Most complaints in California come from people in this category, said California Sen. Dianne Feinstein. A 60-year-old San Franciscan earning just over the cutoff of $47,520 a year now pays $946 a month under Obamacare, Feinstein said.

“That’s simply not affordable,” she said.

Feinstein and her California Senate colleague, Kamala Harris, proposed legislation last month to eliminate the income cliff for middle-class workers by limiting the cost of health insurance premiums to 9.69 percent of a person’s income. The monthly premium for someone making $50,000 would be no more than $404 per month under the formula, a savings of $542 per month, they said. A person earning $80,000 would pay no more than $646 per month, saving $300.

“Right now, many middle-class families are still struggling to afford insurance, and that’s not acceptable,” Harris said. “Let’s fix that.”

Back to Gallery Obamacare could easily be fixed with a few bipartisan... 2 1 of 2 Photo: Mark Wilson / Getty Images 2 of 2 Photo: Alex Brandon, Associated Press



The Urban Institute, a liberal-leaning think tank, pegged the cost to the government if the Feinstein-Harris subisidy plan were enacted at well under $1 billion a year.

Linda Blumberg, an economist at the institute, said the subsidy would “phase out naturally” as people’s income rose, but would provide significant help for people close to the cutoff, especially older workers who face much higher premiums than younger people.

“It would certainly be an affordability improvement,” Blumberg said.

Part of the reason costs for middle-class workers buying policies on the exchanges are so high is “because health care is very expensive,” said Andy Slavitt, acting administrator from 2015 to 2017 of the Centers for Medicare and Medicaid Services, the federal agency that runs the government’s health care programs

But another reason, he said, is that the federal government spends billions of dollars to ensure that every other group of Americans receives federal health care aid: the poor, veterans, seniors, children, and workers with employer-sponsored insurance, who alone receive about $300 billion a year in tax breaks through their employers.

As for the other major complaint from policy buyers, analysts say various methods could be used to increase competition among insurers and providers in rural markets. Blumberg said the government could remove the monopoly power some providers now wield in rural areas by capping payments to them at Medicare levels. Slavitt recommends providing people in such markets with a public health care option.

Gail Wilensky, the head of the Centers for Medicaid and Medicare under the George H.W. Bush administration, sees promise in a plan put forward by Republican moderates Susan Collins of Maine and Bill Cassidy of Louisiana to let states keep the Affordable Care Act or set up their own insurance systems using subsidized health savings accounts and high-deductible plans.

“That is a way to reach out to people who think that the Affordable Care Act has been fine and to people who want to take a different approach to getting coverage to people,” Wilensky said.

Some of the problems with the Affordable Care Act stem from Congress’ refusal to correct problems that surfaced during the law’s implementation. Such fixes often follow enactment of a new law, especially one of this magnitude, as it takes effect. But Republicans insisted on wholesale repeal and set about undermining the law. They became increasingly emboldened as the party took control of the House in 2010, the Senate in 2015 and the White House this year.

“They took a series of actions that crippled the exchanges,” Slavitt said.

These included lawsuits that had the effect of raising premiums in some states, and killing funding for a “rate stabilization fund” that spread insurer risk.

In May, President Trump threatened to withhold federal payments to insurers that help them subsidize low-income policyholders, rattling the insurance market. Uncertainty surrounding the GOP repeal effort has also fueled an insurer retreat.

The administration stopped advertising the exchanges, ending a cost-effective way to increase enrollment, which in turn lowers premiums.

“There was a longer-term political game being played to drive up rates and reduce competition so that people could rail against the ACA,” Slavitt said.

Conservative-leaning insurance analyst Robert Laszewski noted on his blog that a problem with the exchanges is that only 40 percent of eligible people ever signed up, “leading to a risk pool with too many sick people and too few healthy people to pay their claims.”

“The Republicans are only going to make this problem worse.”

The Senate Republican bill does include some long-recommended fixes, said Blumberg of the Urban Institute. These include a reinsurance program in the Affordable Care Act, allowed to lapse, that diversified the risk of extremely high-cost patients and helped lower overall premiums.

But the main target of the Senate, and a similar GOP bill approved by the House in May, is not the exchanges that Republicans say are collapsing, but Medicaid, the nation’s largest health care program. It provides health coverage to the poor as well as two-thirds of nursing home patients and 1 out of 3 children, and was expanded under the current law to cover the near-poor.

Both Republican bills slash Medicaid spending and fundamentally alter the program by ending its open-ended entitlement, a long-standing conservative goal unrelated to the Affordable Care Act. Both bills use the savings to reduce taxes on high-income people, insurers and drug companies.

Democrats insist that Republicans abandon this approach, but that is unlikely unless McConnell’s bill fails in the Senate.

At that point, “it is unclear what options Republicans would have if they can’t get a bill to President Trump’s desk,” said Dan Holler, a vice president at Heritage Action for America, a conservative advocacy group.

GOP moderates, like Collins, have expressed a desire to “go back and fix piecemeal the parts of Obamacare that they can agree are broken,” he said.

Such fixes are well known and within reach, but would require Republicans to give up on repeal.

“They can be done state by state,” Slavitt said, “with a little more money and a little more legislation but nothing dramatic.”

Carolyn Lochhead is The San Francisco Chronicle’s Washington correspondent. Email: clochhead@sfchronicle.com Twitter: @carolynlochhead