After seven years of the Affordable Care Act, health-insurance premiums continue to rise, individuals remain reluctant to sign up, and many insurers are pulling out of the marketplace altogether.
Congressional Republicans promised wholesale reform, but the budget-reconciliation process confined them to the basic framework established by the ACA. As a result, the bill they proposed, the American Health Care Act, was profoundly unpopular, and the scramble for votes is only making it more so.
Republicans rightly wish to restore actuarial pricing to health-insurance markets while subsidizing the plans of the chronically ill who need greater assistance. But a combination of unilateral executive actions and bipartisan incrementalism is likely to be far more effective in achieving those ends than reconciliation legislation would be.
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The core provision of the ACA prevented health insurers from pricing plans in proportion to individuals' expected costs of care.
This has meant that insurers are paid inadequately to cover the costs of the chronically ill, and has forced healthy beneficiaries to pay far more in premiums than they are likely to need in care — producing a dysfunctional market that works well for neither buyers nor sellers.
To advance an ACA-replacement proposal that Democrats could not block with a filibuster, the Republicans sought to use the reconciliation process, which the Senate has traditionally permitted only for matters of direct spending and taxation. Through reconciliation, the GOP can unilaterally alter the ACA's penalties for those failing to purchase insurance, as well as its cost-sharing and premium subsidies.
But these essentially serve as buttresses to the ACA's insurance-market reforms, which reconciliation can do nothing to change. In short, reconciliation allows the GOP to further undermine the stability of the ACA's insurance market, but not to remedy its fundamental structural flaws.
That explains why the House GOP's AHCA has run into so much trouble. By eliminating the individual mandate without repealing the ACA's premium regulations, it reduced the number of healthier Americans that would purchase plans.