Donald Trump has said he would repeal Obamacare. But he wants to keep some parts, like forcing insurance companies to insure people with preexisting conditions.
This sounds like a middle-ground compromise. It even sounds like good news that insurance plans will no longer be able to deny coverage to sick people. But here's the thing: Taking out that single piece would likely cause the entire system to collapse.
This cartoon explains why:
Let’s start with 10 people, some sick and some healthy.
Before Obamacare, insurance companies could refuse to give insurance to people who were too sick. That's because covering them would cost too much money — and they didn't want to raise prices on relatively healthy people.
This is how Obamacare solved that problem
Obamacare forced insurance companies to cover sick people — but it did two other things in concert, which holds the system together.
These things work together. Economists like to describe them as a three-legged stool — and you need all three pillars to make the stool sit steady.
But some parts of this system are unpopular, like the individual mandate. Other parts are popular, like forcing insurance companies to cover sick people at an affordable cost. Yet you can't have one without the other. If you get rid of any leg of the stool, it all falls apart.
But Trump just wants to keep the popular parts
This is what that would look like:
One way Trump could keep healthy people in the pool is by providing even more subsidies to further incentivize healthy people to keep paying for insurance. But that would mean spending even more on health care — something his fellow Republicans are unlikely to pass.
So if the only part of Obamacare that Trump keeps is forcing insurance companies to cover everyone, then it's likely insurance costs will skyrocket — or that it will even result in a "death spiral."
We know this probably won't work because we've tried this before
In the 1990s, New York, along with other states, also forced insurers to cover everyone, no matter how sick. But they didn't do anything to incentivize healthy people to keep their insurance, like mandating coverage or providing subsidies. So as the New York Times' Margot Sanger-Katz reports, this is what happened:
When Obamacare kicked in, it added in the two missing portions: The individual mandate and the subsidy. And then costs plummeted.
We can't just have the good parts of Obamacare
It's not a huge surprise Trump just wants to keep the good parts. He's a populist, anti-establishment politician. But in this case, you can't just give the people what they want — because the unpopular portions of the law are what make the popular portions work: