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Republicans are struggling to find the proper pitch for their attack on the Affordable Care Act (ACA). “Repeal and replace” — the tried and true formulation — may be mutating into something mellower, albeit more vacuous. “Americans want the ACA repealed and repaired,” Republican strategist Frank Luntz recently told the Associated Press, using the new nomenclature. Should this right-wing retreat — or rather, recalibration — be construed as a victory, however minor? Probably not, for two reasons. First, whatever the tweak in marketing, the crux of the matter hasn’t changed: Republicans seem poised to engineer an enormous increase in uninsurance in the coming years (at the cost of countless lives). And second, “repeal and repair” will double down on the worst elements of the status quo. Whatever term they use, Republicans never intended to remove the central pillar of the US health care system (and the ACA): private health insurance. As two of my colleagues, David Himmelstein and Steffie Woolhandler, put it shortly after Trump’s election: We suspect that the [Republican’s] likeliest replacement [for the ACA] is a meaner (and rebranded) facsimile of the ACA that retains its main structural element — using tax dollars to subsidize private insurance — while imposing new burdens on the poor and sick. The 2016 health care reform framework of Paul Ryan and the House Republicans, for instance, would provide tax credits to help individuals and families purchase private plans “through multiple portals, including private exchanges.” Ryan’s tax credit scheme amounts to a more regressive version of the ACA’s subsidies for plans bought on the “marketplace” (also known as “exchange” or “Obamacare” plans). In other words, we should expect the looming GOP health care overhaul to be more right-wing regression than reactionary revolution. This relative continuity highlights an important point: one of the ACA’s key mechanisms for moving us toward universal health care — publicly subsidized, privately sold “marketplace” plans — was never going to achieve its goal. Millions now rely on these plans, and we should defend them until we can win something better. But we also shouldn’t entertain any illusions: the ACA marketplaces rest on a flawed health care ideology that tellingly attracts many adherents on the Right, including Ryan. What are the roots of this ideology — sometimes known as “managed competition” — and how can we move beyond it?

The Origins of Managed Competition In 1971, a physician named Paul Ellwood coauthored a hugely influential proposal called the “health maintenance strategy.” Formulated at a time when a national health insurance program seemed just around the corner, Ellwood and his colleagues framed their program as a pro-market alternative. Under the plan — unlike the bold 1971 national health insurance proposal of liberal senator Ted Kennedy or the even more radical program of democratic socialist congressman Ron Dellums — “the consumer would be able to purchase health maintenance services from a variety of competing organizations.” Nixon latched on to the proposal, while the momentum behind national health care reform dissipated, at least until the Carter administration. Yet Carter — and after him, Bill Clinton and Barack Obama — never returned to the national health insurance proposals of the early 1970s. Instead, Democrats increasingly turned to remedies rooted in managed competition. In 1978, Alain Enthoven published a reworked vision of this approach (which he initially drafted for the Carter administration) in two papers in the New England Journal of Medicine. Calling his new iteration the “consumer-choice health plan,” Enthoven explained that the proposal “seeks to give the consumer a choice from among alternative systems for organizing and financing care, and to allow him to benefit from his economizing choice.” He saw the private health industry as the critical player: the consumer-choice health plan, Enthoven wrote in the final words of the paper, “offers private health insurers continued existence and a meaningful role.” Over time, Enthoven’s model of health care reform (along with other often conservative ideas like the individual mandate) found a central place in prominent Democratic Party health policy proposals. (Sociologist Howard Waitzkin has argued that Enthoven’s managed care approach gained purchase not only in the US, but throughout the world.) By the time Barack Obama took up the charge for health care reform, most Democrats had given up on the idea of public national health insurance. The final bill Obama signed reflected the shift in policy remedies — particularly the ACA marketplaces. As Enthoven himself noted in 2014, the ACA “exchanges drew on the MC [managed competition] idea, with cost-conscious individual choice of plan” (though, as he added, this was only “for a small part of the population”). Although the marketplaces differ in important ways from what Enthoven and others had in mind, they share a common assumption: that the best system is one in which consumers shop for the private health insurance plan that best suits their individual needs. The resulting competition among plans, Enthoven and others argue, will keep down costs and improve access. Despite Republicans’ bluster about the horrors of the ACA, they share the same basic philosophy. They too want insurance exchanges — just more meager and more privatized ones.

Marketplace Dreams It’s easy today to forget what grandiose hopes the ACA’s architects had for the law’s marketplaces. Ezekiel Emanuel — President Obama’s special adviser on health care reform during the years the ACA was written — was among those who thought the marketplaces could refashion the whole of American health care. In his 2014 book Reinventing American Healthcare (lauded by Lawrence Summers as the “definitive primer on health care in America”), Emanuel predicted: [O]nce the websites are fixed and working smoothly — certainly by 2016 — the exchanges will generate positive branding . . . That means the websites need to provide an engaging, “Amazon-like” shopping experience . . . By 2016 the insurance exchanges will provide an attractive, informative, and engaging insurance shopping experience with an adequate variety of choices. But Emanuel foresaw (and hoped for) much more. Gradually, employers would stop providing insurance, and workers would increasingly gravitate toward (or, more precisely, get dumped onto) the marketplaces. It would start with millenials: Younger workers who have little experience and expectation of getting health insurance from their employer and are used to shopping for books, music, shoes, clothes, smartphones, and cars on the web will probably be most amenable to now getting their health insurance on the web as well. As for older, perhaps less web-savvy, workers, Emanuel acknowledged that they might resist the new zeitgeist. In that case, they’d have to be “socialize[d] . . . on how exchanges work” through the use of “private exchanges.” A broader “cultural” reorientation would also have to occur: “Companies will have to be convinced that they can still be viewed as good employers even if they do not offer health insurance,” Emanuel wrote. He predicted that big private companies would be the first to see the light and stop offering insurance, while the public sector would stubbornly fight the marketplace road since “unions are very conservative on health coverage.” (Emanuel, to be fair, also envisioned workers receiving wage increases in exchange for the lost health benefits.) Finally, over time, employer-provided health insurance would morph into “a voucher system” in which “[i]ndividuals rather than employers will be choosing from a variety of health insurance options in a marketplace . . . [W]ith the voucher, the consumers will have a strong incentive to be frugal in their purchase of insurance.” Emanuel’s consumer-friendly future hasn’t come to pass. Far from overtaking the employer market, marketplace enrollment has consistently fallen below expectations. And dysfunctions in the marketplaces, while exaggerated by the Right, have been by no means imaginary. Last year, for instance, two big insurers, Aetna and UnitedHealth, announced they would withdraw from the majority of marketplaces where they sold plans. And in October, just before the 2017 open enrollment period began, the White House admitted that premiums for many Obamacare plans would see significant increases — 22 percent, on average .

Obamacare’s Foibles The most obvious problem with the marketplace plans is that they fail too many individuals — even if they offer more protections (and are more affordable, with subsidies) than the individual plans they succeeded. Consider the cost-sharing burden (i.e. out-of-pocket costs after premiums) that marketplace plans place on enrollees. Here are the 2017 estimates from the firm Health Pocket for average deductibles and out-of-pocket maximums (the most an enrollee forks over annually for health services after they pay their premium): Metallic Tier Annual Deductible (family plan) Annual Out-of-pocket maximum (family plan) Bronze $12,393 $13,810 Silver $7,474 $12,952 Gold $2,745 $10,168 Platinum $809 $4,318 Although subsidies reduce the financial burden for those earning less than 250 percent of the federal poverty level, cost-sharing still remains onerous for many individuals and families. This allows Republicans to cynically score points, criticizing sky-high deductibles while simultaneously embracing “consumer-driven” high-deductible health plans that will almost certainly make the problem worse. But the shortcomings of the marketplace model go beyond issues of cost. For proponents, the beauty of managed competition is that it allows consumers to avoid premium increases by simply shopping for a new plan. In some cases, it works out this way: companies compete, and consumers avert skyrocketing premiums. But even in the best-case scenario, it is a preposterous way to manage health care costs. Take, for instance, the individuals and families who need several doctors or require care from particular hospitals. Changing plans annually can mean having to abruptly sever all provider relationships and make appointments with an entirely new panel of doctors every year. Such discontinuity of care is not just massively inconvenient — it can also be positively dangerous. The point is not that the ACA has made things worse. On the contrary — it’s expanded health insurance to an estimated 20 million people, and improved coverage for many more. One recent survey found that the number of non-elderly adults who had problems getting health care because of financial reasons fell from a whopping 80 million in 2012 to (a still whopping) 63 million in 2016. (The number of people paying off medical debt, however, has not really budged.) But if the gains of the ACA are real, its failures are also considerable. And those failures are due in large part to the managed competition model baked into the law.