Ailing Obama Health Care Act May Have to Change to Survive

The fierce struggle to enact and carry out the Affordable Care Act was supposed to put an end to 75 years of fighting for a health care system to insure all Americans. Instead, the law’s troubles could make it just a way station on the road to another, more stable health care system, the shape of which could be determined on Election Day.

Seeing a lack of competition in many of the health law’s online insurance marketplaces, Hillary Clinton, President Obama and much of theDemocratic Party are calling for more government, not less.

The departing president, the woman who seeks to replace him and nearly one-third of the Senate have endorsed a new government-sponsored health plan, the so-called public option, to give consumers an additional choice. A significant number of Democrats, for whom Senator Bernie Sanders spoke in the primaries, favor a single-payer arrangement, which could take the form of Medicare for all.

Donald J. Trump and Republicans in Congress would go in the direction of less government, reducing federal regulation and requirements so insurance would cost less and no-frills options could proliferate. Mr. Trump would, for example, encourage greater use of health savings accounts, allow insurance policies to be purchased across state lines and let people take tax deductions for insurance premium payments.

In such divergent proposals lies an emerging truth: Mr. Obama’s signature domestic achievement will almost certainly have to change to survive. The two parties agree that for too many people, health plans in the individual insurance market are still too expensive and inaccessible.

“Employer markets are fairly stable, but the individual insurance market does not feel stable at all,” said Janet S. Trautwein, the chief executive of the National Association of Health Underwriters, which represents more than 100,000 agents and brokers who specialize in health insurance. “In many states, the individual market is in a shambles.”

Mr. Obama himself, while boasting that 20 million people had gained coverage because of the law, acknowledged in July that “more work to reform the health care system is necessary.”

“Too many Americans still strain to pay for their physician visits and prescriptions, cover their deductibles or pay their monthly insurance bills; struggle to navigate a complex, sometimes bewildering system; and remain uninsured,” Mr. Obama wrote in The Journal of the American Medical Association.

The marketplace faces a major test in the fourth annual open enrollment season, which starts on Nov. 1, a week before Election Day. In many counties, consumers will see higher premiums and fewer insurers, as Aetna, Humana and UnitedHealth have curtailed their participation in the exchanges, and many of the nonprofit insurance cooperatives, created with federal money, have shut down.

Mr. Trump has said that Congress must “completely repeal Obamacare,” and Republicans in Congress have repeatedly tried to do so. But parts of the law appear to be here to stay. One such provision, now widely accepted, says that insurers cannot deny coverage because of a person’s medical condition or history.

For their part, many Democrats are clamoring for a public insurance option, as they did nine years ago.

“Supporters of the public option warned that private insurance companies could not be trusted to provide reliable coverage or control costs,” said Richard J. Kirsch, who led a grass-roots organization that fought for passage of the Affordable Care Act in 2009 and 2010. “The shrinking number of health insurers is proof that these warnings were spot on.”

On Sept. 15, Senator Jeff Merkley, Democrat of Oregon, introduced a resolution calling for a public option. The measure now has 32 co-sponsors, including the top Senate Democrats: Harry Reid of Nevada, Chuck Schumer of New York and Richard J. Durbin of Illinois.

“You need competition to make the exchanges successful,” Mr. Merkley said in an interview. “A public option guarantees there’s competition in each and every exchange around the country.”

As they did before the Affordable Care Act was enacted, insurance lobbyists are mobilizing to kill the public option. The main trade group for the industry, America’s Health Insurance Plans, says it would do nothing to stabilize the exchanges, and in an urgent “action alert,” the group asked member companies to lobby against Mr. Merkley’s resolution.

Senator Lamar Alexander, Republican of Tennessee and chairman of the Senate health committee, said the Democrats’ public option plan would compound the problems it seeks to solve.

“Obamacare exchanges are collapsing because of federal mandates and a lack of flexibility,” Mr. Alexander said. “We need to give states more flexibility and individuals more choices so more people can buy low-cost insurance.”

Mr. Trump would replace the Affordable Care Act with an assortment of conservative policies, including some that are similar to ideas favored by House Republicans and by think tanks like the Heritage Foundation or the American Enterprise Institute. But Democrats and some Republicans say that Mr. Trump has not laid out a comprehensive, coherent alternative to the Affordable Care Act.

Mr. Trump would eliminate the requirement that most Americans carry health insurance. He would encourage the sale of insurance across state lines, in a bid to increase competition. And he would convert Medicaid, now an open-ended entitlement, into a block grant, giving each state a lump sum of federal money to provide health care to low-income people.

The basic structure of the Affordable Care Act looked promising to private insurers. The government, in effect, required consumers to buy their products and provided subsidies to help defray the cost, under an arrangement that had few precedents in other industries.

A public option could take market share from private insurers, so it is no surprise they would oppose it. But insurers say the public option would not hold down medical costs, which they describe as the main engine driving up premiums. Moreover, insurers say that the government would have an unfair advantage if it both regulates and competes with private plans.

For some people, the subsidies have proved inadequate. People with annual incomes less than two and half times the poverty level (less than $29,700 for an individual) receive the most generous subsidies and have signed up in large numbers.

But enrollment figures suggest that higher-income people who receive smaller subsidies or none at all have not seen insurance as such a bargain.

“The insurance exchanges have enrolled more than 80 percent of the potential exchange population with incomes below 150 percent of the federal poverty level,” said Caroline F. Pearson, a senior vice president of Avalere, a health policy consulting company. But, she added, they have enrolled only 17 percent of potential customers with incomes from three to four times the poverty level ($35,640 to $47,520 for an individual).

Andrew M. Slavitt, the acting administrator of the Centers for Medicare and Medicaid Services, said the administration was taking steps to ensure “a stable, sustainable marketplace” — by increasing payments to insurers for “high-cost enrollees” and by curbing any abuse of “special enrollment periods” by people who sign up for coverage after they become sick. In addition, federal officials are redoubling efforts to sign up young adults.

Dr. John W. Rowe, who was the chief executive of Aetna from 2000 to 2006 and the president of Mount Sinai Medical Center in New York before that, predicted that “the insurance market will stabilize in two or three years.”

“We are not in a death spiral,” Dr. Rowe said. “If this were a patient, I would say that he’s not in intensive care, but he’s still in the hospital and requires careful monitoring.”

But that does not mean the act will heal on its own, said Sara Rosenbaum, a professor of health law and policy at George Washington University.

“Even the most ardent proponents of the law would say that it has structural and technical problems that need to be addressed,” she said. “The subsidies were not generous enough. The penalties for not getting insurance were not stiff enough. And we don’t have enough young healthy people in the exchanges.”

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