The Donald’s health care plan…FWIW, which ain’t much

March 3rd, 2016 at 9:10 am

I just had a look at Trump’s skinny-down health care plan. Here’s my summary:

1. Repeal Obamacare
2. Kick out undocumented immigrants
3. ???
4. Enjoy awesome health care!

There’s a bit more in there, some of which is good, some of which is terrible, and most of which is beside the point.

Block granting Medicaid—turning it over to the states with a fixed funding amount—is a great way to surgically remove its critical countercyclical function: its ability to expand to meet increased need in recessions. In fact, in the last downturn, the feds helped states a great deal by ramping up DC’s share of their Mcaid bill.

There’s some mysterious stuff in there about allowing “individuals to use Health Savings Accounts (HSAs).” Um…they already can.

Similarly, his “idea” to allow you to deduct premium costs from your taxes is at most redundant and otherwise a regressive waste. Employers already deduct employer health costs—it’s the biggest tax expenditure in the system. The self-employed can already do the same. Low income people don’t incur a federal tax liability against which to deduct anything. The people who will benefit from this surely already have or can afford coverage. It’s therefore just a wasteful giveaway.

He goes after big Pharma a bit—there’s his populist instincts coming through—by allowing importation of cheaper drugs from abroad. Assuming quality control—the importation of known, established drugs or generics—that’s a good idea. The key, however, will be allowing Mcare and Mcaid to purchase them.

There are a couple of other standard issue R ideas—selling health insurance across state lines; price transparency. The former won’t have much impact on anything and while the latter is obviously a fine goal, it’s complicated by unique aspects of health care. Comparison shopping unquestionably saves money when you’re buying a sweater from Amazon; less so when it’s a hip replacement. One place where such transparency matters is in choosing a health care plan, and the Obamacare exchanges have made real advances in clear pricing and standardization. In fact, cost control is of course a key goal of Obamacare, and there’s evidence that it has been effective.

Whatever. This campaign ain’t exactly about policy. But any first-year public policy student who submitted this as their health care plan would be kicked out of school, if not deported.

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8 comments in reply to "The Donald’s health care plan…FWIW, which ain’t much"

  1. Farhan says:

    ACA on the surface may have dent the cost and healthcare inflation but it is muddy if you are looking at in details. Devil is in the detail

  2. Jill SH says:

    A ‘Rump health care plan. Ho hum.

    re: #3. ????? (in the words of the old New Yorker cartoon, ” A miracle happens here”)

    re: HSAs are just another tax shelter for people with enough income to be able to save an extra retirement acct. It’s not money that goes into keeping health care costs down.

    re: Same with deducting health care premiums. (I’m self-employed.) When/if you make enough to have to pay taxes.

    re: Re-importing lower cost drugs. They’re probably lower cost because that foreign government negotiated the price.

    re: Price transparency. I’ve always said, if folks knew the real cost of medical treatment, nobody would ever go to the doctor. Besides, the whole point of insurance is to shield us from those costs. And the skin-in-the-game attitude for “consumer-directed” healthcare? If you’re shopping around for cheaper services while in that deductible range, are you really saving money for yourself or for your insurance co?

    re: State lines. In fact, we found in NH that anybody could do that. But try to get your Alabama insurance to cover you at Mass. General.

    Once you really look at it, O’care does a good job of covering all the bases.

    BTW, did you see his speech from Milwaukee today?

    • Jared Bernstein says:

      All great points. The state lines hasn’t worked when it’s been tried in the past because insurers in one state tend not to have provider networks in another state. Not to mention “death spiral” of in-state plans when crap, cheap out-of-state plan signs up all the healthy people.

  3. Smith says:

    The only health care plan offered through my employer has a $6,000 deductible, which effectively means I have only catastrophic health insurance. I do pay only a paltry thousand or two for this insurance which (hopefully) I will never need (the whole point of insurance, shared risk). However, for a family of four, they would pay more, and baring a serious condition, also never approach the spending limit of $6000 in one year. Obamacare for them likewise does very little. It does help lower costs and it does provide for those facing major medical care, even one broken bone, or one emergency, which is a considerable benefit. It doesn’t provide what we would normally consider health insurance.

    Not to dismiss the great step forward Obamacare represents, but politically it was and remains a compromise. It is difficult to defend because it’s not a universal benefit. It has moved debate as now even Republicans must pay lip service to the idea of universal coverage of some sort.

    Of course the way to get to universal coverage is by advocating for universal coverage. Only one candidate does.

    • Jill SH says:

      Smith: I’m sympathetic to your dilemma. But let’s be sure that we identify exactly where the problem is:
      “The only health care plan offered through my employer…” You have no choice in your health care plan due to the fact that it’s your EMPLOYER who chooses, and you/we are constrained to this as long as we have employer-based health insurance as our main structure. This was in place before Obamacare, and it’s something O’care specifically tried not to disrupt, because it would be politically really scary for many Americans who relied on it.

      Universal health care can be achieved by something other than single-payer. Germany and Switzerland are such examples. Where there is a hybrid of government programs, government subsidies for health insurance, and employer-based coverage, the key is government regulation of the plans. Prohibiting excessive deductibles and co-pays, at least in relation to one’s income level, and establishing comprehensive coverage standards, especially for preventive primary care and chronic condition maintenance, in ALL plans, whether public or private, would go a long way toward mitigating current disparities in the nature of coverage. O’care does do this to some extent — all plans in the Marketplace exchanges must meet certain standards, and the subsidies make personal cost responsive to ability to pay. These protections need to extend to employer-based plans as well.

      I personally feel it is best for us now to continue to push for improvement of the ACA — maybe by adopting state public options. If we try to move to a single-payer plan, we’re talking about abolishing the whole health insurance industry. I’m flummox at trying to figure out just what value they add to the whole healthcare system, but it’s a battle I wouldn’t want to take on just yet.

      We do have tools to cover all people well, and ways to bring down costs. Let’s keep working with that.

  4. Smith says:

    Let’s be sure that we identify exactly where the problem is, it’s in the ignorance, cowardice, fraud, and corruption of politicians who are swayed by rich donors and healthcare entities that benefit from the current system. This includes plenty of Democrats as well as Republicans.
    Medicare, medicaid, and other government programs already combine for about 45% of healthcare spending.
    No one favoring a single payer system thinks we should abandon seeking to continue efforts to improve the current one. But advocating for a greater change, for a better system, would actually help pass measures designed to correct flaws in the current law.

    There is a political battle being waged now over single payer having little to do with it’s merits. Instead, supporters of one candidate deride plans of the opposing side.

  5. Kevin Rica says:

    Haven’t read Trump’s paper. HOWEVER, the basic idea does make sense.

    Basic rule of economic textbooks: You can regulate either prices or quantities, but you can’t simultaneously regulate both. Trump’s approach reduces total employment and lets wages and benefits rise.

    If we mandated that all employers provided health insurance, probably we would loose jobs and unemployment would increase.

    If Trump got his way on immigration and figured out a way to make 8 million FTEs leave, unemployment would go down, wages (including health benefits) would rise, and a couple million of those jobs probably would not be filled.

    Then if Trump insisted that all new immigrants have employer-paid healthcare (executive order expanding the meaning of “public charge”), that would increase the pressure on employers to offer healthcare to employees, since there would be fewer workers available willing and authorized to work without it.

    I reiterate: Basic rule of economic textbooks: You can regulate either prices or quantities, but you can’t simultaneously regulate both. Trump’s approach reduces total employment and lets wages and benefits rise.

  6. Pestcom India says:

    The Obama Care could be approved in american senate. Now let us who can do this miracle.
    I think there should be integrated healthcare management services in America.