Feb 11, 2017 5 min read

Republicans have tried to repeal the Affordable Care Act – also known as Obamacare – more than 60 times in the last six years. But during those six years, they never agreed upon a replacement, primarily because Obamacare is the Republican approach to providing health care – relying on private insurance companies competing for customers in the market to make health care delivery efficient.

While some aspects of Obamacare are very popular, such as allowing children to stay on their parents’ health insurance plans until they turn 26, or allowing customers to buy insurance even if they have pre-existing conditions, two aspects of Obamabare are unpopular. The first is the requirement that everyone has to have health insurance or pay a penalty. The other, which is really just a variation of that, is that people with very limited coverage have to purchase more comprehensive (and more expensive) policies. Americans don’t like mandates, and many young, healthy people don’t want to pay for insurance because it’s expensive and they don’t think they’ll need it. And most of the time they’re right.

But there are two major problems with people going without insurance. First, the whole idea behind insurance is that it is a way to make risk predictable. Instead of not having insurance, and hoping you don’t get sick, you pay a predictable price for coverage in case you do get sick. So the premiums of healthy people, who don’t need much health care, help pay the costs of sicker, older people, who do. If everyone gets more in benefits than they pay in premiums, it breaks down.

The second problem for people who choose not to have insurance is that they might actually get sick and need it. If they are not very sick, or they’re wealthy, they may be able to pay for the treatment themselves. And while they may be in worse shape financially, the system would still work. They made the wrong decision, but they only hurt themselves. This is where one Republican idea not part of Obamacare, health savings accounts, would help by encouraging people to have money set aside for this purpose. But these tax-favored accounts benefit the rich more than anyone else, and they generally need less help with health care costs.

Larger problems arise when individuals cannot pay for their treatment. They might have to declare bankruptcy – medical bills are a leading cause of bankruptcies in the United States – which hurts them and their creditors, but also hurts providers, who are not getting paid for their services. And if this happens enough, providers have to get the money from somewhere or go out of business. Prior to Obamacare, many hospitals that provided free health care for people without insurance recouped those costs by charging those who could pay higher prices.

The problem Republicans cannot escape is if they want to keep private insurers in the system, people who use less health care must subsidize those who use more. Under Obamacare, the healthy and insured have subsidized the unhealthy insured, while the poor, healthy or not, have received subsidies. This is the most market-based approach, since it ensures that everyone has the resources to participate in the market, and relies on the market to ensure efficiency. Republicans can approach the problem differently by, for example, creating subsidized “high-risk pools” for people who will need more health care, while letting insurance companies serve the healthy. But that just makes it easier for those companies to privatize the profits that come from healthy patients while making taxpayers cover the losses, without improving efficiency. Caps on the pool subsidies will save money by limiting care for the very sick, a rationing process that Republicans claim to abhor.

Obamacare does face problems in some markets where insurance companies raised prices dramatically or have withdrawn because not enough healthy people have signed up, so they were losing money. But fixing these problems does not require starting over; the solution is a higher tax penalty on the uninsured to encourage more to participate, and a government option in markets with few private insurers. Of course, the best fix would be to get rid of the bureaucratic complexity and profits associated with relying on private insurers, and implement a single-payer system to keep costs down while providing comprehensive coverage. But that won’t happen in the current political climate. One Republican proposal that might find approval is retaining Obamacare in Democratically-controlled states, while letting Republican states try something else. This might provide a politically acceptable way to see what works best, though it would also require some way of preventing people from moving to a state with generous coverage once they get sick and try to take advantage of a system they did not help fund.

In any health care system, most people will pay more into the system than they get out in services. While this seems to be a financial loss, people in this situation should consider themselves lucky; it means they were healthy, and avoided the problems associated with being sick. Obamacare is not perfect, but it has greatly increased the number of Americans who have health care, and its benefits warrant fixing it rather than replacing it, especially when any Republican replacement that provides similar coverage will have to rely on the same general characteristics.

Kent James is a resident of East Washington.