Browsing the blog archivesfor the day Monday, January 16th, 2017.


Trump: Everybody Gets a Pony! But Maybe Not Health Insurance

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Bad Hair, Health Care, Medicare, Republican Party

By now you’ve probably heard that Trump is putting the finishing touches on a health care plan that will provide health insurance for everybody.

President-elect Donald Trump said in a weekend interview that he is nearing completion of a plan to replace President Obama’s signature health-care law with the goal of “insurance for everybody,” while also vowing to force drug companies to negotiate directly with the government on prices in Medicare and Medicaid. …

… Trump said his plan for replacing most aspects of Obama’s health-care law is all but finished. Although he was coy about its details — “lower numbers, much lower deductibles” — he said he is ready to unveil it alongside Ryan and Senate Majority Leader Mitch McConnell (R-Ky.).

“It’s very much formulated down to the final strokes. We haven’t put it in quite yet but we’re going to be doing it soon,” Trump said. He noted that he is waiting for his nominee for secretary of health and human services, Rep. Tom Price (R-Ga.), to be confirmed. That decision rests with the Senate Finance Committee, which hasn’t scheduled a hearing.

Since he mentioned Tom Price here, one suspects that if there is an actual Trump plan, it’s Tom Price’s. So let’s look at that. Here is what Price has proposed:

1. Get rid of the insurance exchanges and their subsidies. Instead, offer fixed tax credits to help people buy insurance on the private market.

Those tax credits would be fairly modest, ranging from $1,200 a year for people 18 to 35 years of age to $3,000 for those 51 and older. In many regions of the country, that would hardly begin to cover the premiums and out-of-pocket costs for a relatively comprehensive health insurance plan.

2. Insurance companies cannot deny insurance to people with pre-existing conditions provided they been insured continuously for the previous 18 months. If you lose coverage because you can’t make a payment, too bad. No insurance for you.

3. “Expanded” health savings accounts. HSAs are great for young, healthy people who need tax shelters; not so much for anybody else.

4. There would be taxpayer funded high-risk pools for sick people who can’t get insurance. These have been tried in the past and have proved to be bottomless money pits. I’m sure the insurance companies like this idea, though, because it lets them off the hook for insuring really sick people.

Price appears to be seriously low-balling the scope of the problem by proposing to invest a mere $3 billion into state risk pools over a three-year period. Ryan’s “Better Way” plan, for instance, would provide $25 billion over the coming decade, and even that might prove to be woefully inadequate.

5. Price wants to limit the employer tax exclusion for providing health insurance to $8,000 a year for individual policies and $20,000 for families. I suspect people would see their employee benefit health insurance taking bigger bites out of their paychecks.

6. Able-bodied single people would no longer be eligible for Medicaid, no matter how poor they are.

7. Price wants to allow insurance companies to sell insurance across state lines. Republicans are in love with this idea because they think that the competition would force insurance premiums to go down. Nobody who understands the health insurance industry thinks this would work.  See also articles in The Fiscal Times, Forbes, and the New York Times explaining why this is a dumb idea.

What Trump probably will propose is a system that would in theory allow anybody to get insurance, but in practice probably would leave out most or all of the people who gained insurance under the ACA, and more beside. Paul Ryan and other Republicans like to make speeches about giving people “universal access” to health insurance, instead of universal insurance coverage, which I interpret to mean “you can buy all the insurance you want, as long as you can pay for it.” Which, of course, is the catch.

But Trump specifically said,

“We’re going to have insurance for everybody,” Trump told the Washington Post. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.”

He’s either lying or he doesn’t know what he’s talking about. Of course, both might be true. You either stick with some version of the ACA, or go with a single payer/national health care plan, or throw people into the private insurance market to sink or swim. There really aren’t any other options. Tom Price’s ideas won’t work to make health insurance affordable or  reduce health care costs. Health care costs are the real cause of high premiums, and health care costs are high in the U.S. because we have a for-profit system that allows for rampant price gouging.

The part about allowing Medicare to negotiate drug prices is something Republicans have fought tooth and nail since Part D was established in 2003. (Medicaid already allows for some negotiation.) President Obama tried to tweak the Medicare system a bit to allow for some negotiation, but Republicans balked at that, too. Part D is a cash cow for the pharmaceutical industry, and those lobbyists aren’t going down without a fight. Trump will be in for a fight from his own party on that one.

(I have to crab about Democrats, too, however. Recently Bernie Sanders introduced an amendment that would have allowed importation of cheaper drugs from other countries. This had enough Republican votes it would have passed, except that a gang of Democrats voted against it.)

 

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