Clinton and Trump's confusing debate exchange about Obamacare, explained

The second presidential debate included a very lengthy — and very confusing — exchange over Obamacare between Donald Trump and Hillary Clinton.

It left health policy experts, to put it mildly, somewhat bewildered.

The six-or-so minute segment included lots of winding talk about rising health costs, rising premiums, and repealing Obamacare.

But it is possible to decode what actually happened. Clinton defended the Affordable Care Act while offering a blunter critique of the law than the Obama administration typically does — while Trump mostly attacked Obamacare for its costs, while offering an Obamacare repeal proposal that would leave millions uninsured.

Clinton: Parts of Obamacare are working — but premiums are too high

Clinton essentially made three points about the health care law in her statements:

1. The health care law has driven the uninsured rate to an all-time low.
2. Obamacare premiums are too high.
3. Obamacare needs to be fixed, but not repealed.

It is true that the health care law has driven the uninsured rate to an all-time low. The most recent figures show that the uninsured rate has fallen to below 9 percent this year.

But it wasn’t especially surprising to hear a Democrat talk about how the uninsured rate had fallen under Obamacare. What was surprising was how Clinton talked about insurance premiums.

“Premiums have gotten too high,” Clinton stated, flatly.

It is true that premiums are rising faster under Obamacare now than ever before. The Kaiser Family Foundation estimates that, on average, premiums for mid-level plans will rise 9 percent in the Obamacare marketplace in 2017. That’s much higher than the 2 percent increase last year.

The site ACASignups.net, which tracks all premium increases, estimates an average rate increase next year that is much higher, around 25 percent.

Clinton’s response in the debate was notably different from how the Obama administration talks about premium rate increases — it might signal how a new, Democratic president can speak more critically about the health care law.

The Obama administration will admit that premiums are going up faster than before — but officials will nearly-always qualify that statement with a note that millions of Americans have subsidies that offset the cost of those hikes.

And while that is true, it doesn’t mean that high premiums aren’t a problem. For one, there are millions of Americans who don’t get subsidies to buy their own premiums, and who do have to pay these new, high rates. Secondly, if premiums do keep rising quickly, that will make the health law more expensive for the government.

Clinton offered up a positive case for the health care law — alongside talking about the higher insured rate, she also mentioned some of the new benefits insurers must cover — while pointing out some of the law’s problems in a way the Obama administration often doesn’t.

Trump: Obamacare is too expensive, repeal it and replace it with ideas other Republicans have proposed

Trump’s comments on Obamacare were a bit more free-wheeling than Clinton’s — including a surprise mention of M.I.T. economist Jonathan Gruber — but, when you read through the transcript, they seem to also boil down to three points:

1. Obamacare is too expensive for the government.
2. Obamacare is too expensive for enrollees.
3. Congress should repeal Obamacare and replace it with a plan that allows insurance sales across state lines.

“Health care is going up by numbers that are astronomical — 68 percent, 71 percent,” Trump said in his opening statement. He later added that, “Your deductibles are going up, so unless you get hit by a truck, you're never going to be able to use it.”

The premium increases aren’t nearly as high as Trump said — as I mentioned earlier, they’re more in the 9 to 25 percent range. But Trump is right that we’ve had a really quick rise in deductibles in recent years, both on the Obamacare marketplace and in employer-sponsored insurance. In large cities, median deductibles for Obamacare plans can range from $3,000 to $5,000.

But the idea that Trump raised about Obamacare proving too expensive for the government — that the law is “unbelievably expensive for our country,” as Trump put it? That is patently false. The Congressional Budget Office has repeatedly revised down the estimated cost of Obamacare to the government, as you can see in this chart.

This isn’t all good news for Obamacare — part of the reason the price tag has fallen is because enrollment on the marketplaces has been lower than expected. But the idea that Obamacare has come in over budget remains a widely-held misconception, according to polling we conducted last year.

Last, we move on to Trump’s description of what he would do differently with health care. The first idea he talks about a lot is allowing insurance companies to “sell across state lines.” Trump mentioned this a few times:

You're going to have plans that are so good because we're going to have some competition. Once we break out the lines and allow the competition to come.

When we get rid of those lines, you have competition.

We have to get rid of the lines around the state. Artificial lines, where we stop insurance companies from coming in and competing because they want, and President Obama and whoever was working on it, they want to leave those lines because that gives the insurance companies essentially monopolies.

This is an idea that comes up a lot in conservative health policy proposals, that an insurance plan from Alabama (which has very few insurance mandates and regulations) ought to be able to sell in New York (which has lots and lots of mandated benefits). This would give citizens of New York more choice — and force those New York plans to compete with the cheaper Alabama plans.

Would this work? The best available research suggests the answer is no. Margot Sanger-Katz at the Upshot wrote a lengthy piece on this policy idea last year:

The trouble is that varying or numerous state regulations aren’t the main reason insurance markets tend to be uncompetitive. Selling insurance in a new region or state takes more than just getting a license and including all the locally required benefits. It also involves setting up favorable contracts with doctors and hospitals so that customers will be able to get access to health care. Establishing those networks of health care providers can be hard for new market entrants.

One 2012 study of states that did allow insurance sales across their lines didn’t see an influx of new insurers into their states — instead, the newly opened borders didn’t do anything to stimulate competition.

So Trump’s policy idea probably wouldn’t increase insurance competitions. And it certainly wouldn’t do anything to ensure that Americans with pre-existing conditions have access to coverage should he repeal Obamacare, as he promised on Sunday night.

Trump seemed to argue that this proposal would ensure that those with pre-existing conditions would be able to buy health insurance — this part of the transcript is a bit hard to read, but he says, “When we get rid of those lines, you have competition and we'll be able to keep preexisting and help people that can't get, don't have money because we are going to have people protected.”

This is not true: There is nothing about allowing insurance sales across state lines would allow those with pre-existing conditions to buy coverage, should Obamacare be repealed. Because if Obamacare were repealed, insurers would once again have free rein to not cover those with expensive medical conditions.

The nonpartisan Center for a Responsible Federal Budget looked at a Trump proposal that included insurance sales across state lines, and it estimated that 21 million Americans would lose coverage. And there wasn’t anything that else he mentioned Tuesday that would allow those people to get coverage, either.

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