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‘Something Terrific’? Taking a Closer Look at Donald Trump’s Healthcare Plan

‘Something Terrific’? Taking a Closer Look at Donald Trump’s Healthcare Plan

Posted Jul 21, 2016 by Jenifer Dorsey

With the Republican National Convention just ending in Cleveland, Donald Trump is the party’s nominee for the 2016 presidential election.[1] About one year ago, the candidate touted that he would repeal and replace Obamacare with “something terrific,” but he was short on details at the time.[2]

Has Trump refined his healthcare platform? Let’s take a look.

In March 2016, he released proposals for reforming U.S. healthcare.[3] Details appear on the Trump-Pence website—with a rather un-Trumplike clarity. To reform healthcare in America, make it more affordable and improve access and the quality of care, the candidate calls on Congress to act and pronounces that the House and the Senate must (our analysis and opinions appear in italics)[4]:

  • Modify existing law that inhibits the sale of health insurance across state lines

Several health plans sell nationally. The limitations to selling across state lines are likely more self-imposed than due to laws.

Risk adjustors, which attempt to reward insurers that insure more high-risk patients and are part of the economics of Obamacare, are maximized when the insurance company has close relationships with the doctors and hospitals that make up their network of providers. Growing a provider network outside of an insurance company’s service area can be expensive and time consuming, making it a non-starter for many carriers.

  • Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system

If Trump can get this through Congress it would make insurance more affordable for the estimated 5 million consumers who purchase their health insurance on the individual market but do not get government subsidies.

  • Allow individuals to use health savings accounts

Americans can already use health savings accounts when combined with high-deductible health insurance plans.

With the high-deductible and out-of-pocket charges associated with Obamacare plans, allowing all health coverage to be coupled with an HSA could help make out-of-pocket costs for consumers more manageable. Of course, that is only helpful for those who can afford to fund their HSAs.

  • Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals

This is an admirable goal, and hopefully an area in which healthcare can dramatically improve in the near future.

  • Block-grant Medicaid

Allowing states, which know their population better than the federal government , to manage their  own Medicaid budget without the overhead of a federal program can save money and will likely provide better outcomes for members .

  • Remove barriers to the entry into free markets for drug providers that offer safe, reliable and cheaper products

The combination of spiraling prescription drug costs, along with an aging population that takes more prescriptions, is a major driver of healthcare costs. As always, the devil is in the details, but getting a handle on prescription cost will be a key to making health insurance more affordable.

Could Trump be successful in his plan? Based on his past performance of defying the odds, it is difficult to completely discount everything that Trump is looking to accomplish with his healthcare platform. However, as with all things, the details make his proposals appear unlikely. You can read the full text of his healthcare proposals at donaldjtrump.com/positions/healthcare-reform.

Would Trump’s proposed repeal of Obamacare work?

It depends on whom you ask.

A recent analysis by the nonpartisan Center for Health and Economy concluded that, supposing Trump is able to successfully and completely repeal Obamacare, under his proposed replacement plan[5]:

  • 18 million people would be uninsured
  • Premiums would be significantly lower for policies purchased directly by consumers—on average, they would drop 20 percent
  • The new policies available would no longer require minimum-benefit requirements as there are under the Affordable Care Act which would make them more affordable but potentially provider fewer benefits for consumers that  have chronic conditions
  • The individual shared responsibility provision (i.e., individual mandate) would disappear
  • Those with preexisting conditions would no longer be guaranteed coverage
  • The state-based and federally facilitated health insurance exchanges created under the Affordable Care Act would disappear, along with Obamacare subsidies

The study also found “substantial uncertainty” about Trump’s idea for increasing competition among insurers: allowing them to sell policies across state lines.[6] Within a decade, it could lead to as few as 1 million or as many as 7 million people obtaining individual policies.[7] Furthermore, some speculate that Trump’s plan could mean consumers have fewer choices when it comes to doctors and hospitals—the reason being that selling plans across state lines could make it difficult for insurers to build networks.[8]

The Committee for a Responsible Federal Budget concluded that Trump’s plan to repeal and replace Obamacare would cost nearly $550 billion over a decade, or $330 billion incorporating economic growth.[9] The CRFB’s analysis also found that coverage would be significantly reduced—by their estimate, 21 million Americans would be uninsured.[10]

Of course, the likelihood of a repeal is difficult to predict. In an Associated Press article, Lanhee Chen, policy director for the 2012 Mitt Romney presidential campaign, is quoted as saying "I don't think they can credibly do 'repeal' until they have a solid legislative proposal to replace it. […] Politically, you can't really do 'repeal' without the 'replace' coming in right behind it," and “[Trump] has made some vague pronouncements, but that’s not a plan.”[11]

No matter which candidate you vote for in the upcoming election, don’t rely on simple soundbites when it comes to the big issues. Make sure you read up on their proposed healthcare policies as well as others.

 


Legal Disclaimers

[1] The New York Times. “Who Is Running for President?” Updated July 12, 2016. http://www.nytimes.com/interactive/2016/us/elections/2016-presidential-candidates.html?_r=0

[2] Ferris, Sarah. “Trump: I’ll Replace Obamacare with ‘Something Terrific.’” The Hill. July 29, 2015. http://thehill.com/policy/healthcare/249697-trump-replace-obamacare-with-something-terrific

[3] Reuters. “Donald Trump Releases Health Care Plan.” Fortune. March 2, 2016. http://fortune.com/2016/03/02/donald-trump-releases-health-care-plan/

[4] Trump-Pence. “Healthcare Reform.” May 24, 2018. https://assets.donaldjtrump.com/HCReformPaper.pdf

[5] Associated Press. “Trump Healthcare Plan Would Cut Some Premiums but Leave 18 Million Uninsured, Study Finds.” Los Angeles Times. July 7, 2016. http://www.latimes.com/business/la-fi-donald-trump-healthcare-20160707-snap-story.html

[6] Ibid.

[7] Ibid.

[8] Japsen, Bruce. “You May Not Have a Doctor If Trump ‘Gets Rid Of The Lines.’” Forbes. July 10, 2016. http://www.forbes.com/sites/brucejapsen/2016/07/10/you-may-not-have-a-doctor-if-trump-gets-rid-of-the-lines

[9] Committee for a Responsible Federal Budget. “Analysis of Donald Trump’s Health Care Plan.” Last updated May 9, 2016. http://crfb.org/blogs/analysis-donald-trumps-health-care-plan

[10] Ibid.

[11] Alonso-Zaldivar, Ricardo. “With Millions Covered, ‘Repeal and Replace’ Gets Riskier. Associated Press. July 18, 2016. http://hosted.ap.org/dynamic/stories/U/US_GOP_2016_CONVENTION_HEALTH_CARE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2016-07-18-04-06-05