What’s going wrong with Obamacare, explained in under 400 words

In recent months, some large health insurance plans have quit Obamacare, including, most notably, Aetna and UnitedHealthcare.

These exits have raised short-term concerns that the Obamacare marketplaces will have very little competition 2017. One in four healthcare.gov counties will have just one insurance plan on the marketplace next year. But its also true there are areas (mostly those that are urban, with large populations) where the marketplaces remain quite competitive. The level of Obamacare competition, in 2017, will vary hugely from place to place.

Beyond next year, there are now long-term worries about whether Obamacare can transform the country’s insurance markets as supporters had hoped.

The law was meant to be the beginning of America’s transition to a new health care system — one where consumers rather than large companies would buy their own health insurance. In the early 2010s, economists would speculate that big companies would drop their workers onto the marketplace rather than remain saddled with rising premium costs.

The marketplaces’ failures to attract a robust group of health plans to many areas suggest it will be quite difficult for Obamacare’s insurance expansion to deliver on that vision. Companies haven’t shown any interest in moving workers to the marketplaces. They’re still using benefit packages as a way to attract top employees.

What is Obamacare for if it’s not a major transformation of the health care system? Most experts think it will become like other safety-net programs we know, offering limited services to a predominantly low-income population. The plans sold on the marketplace now tend to be inexpensive, but offer a relatively small choice of doctors and hospitals. One former administration official calls this the “Medicaid-ization” of Obamacare.

Whether you view this as a bad outcome for Obamacare likely depends on what policy goals you consider important. The health care law has undoubtedly driven America’s uninsured rate to an all-time low. Twenty million more people have health insurance because of Obamacare. If you’re someone who cares about expanding coverage, this is a big win.

But it’s still true that the law is a far cry from what health wonks envisioned just a few years ago when they saw the health care marketplaces reshaping the industry. And if your key priority with Obamacare was building a more consumer-centric insurance marketplace, then the law is quite clearly falling short — and possibly on the path to failure.

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