By: Alex Mitchell, Director of Information and Content
Here we go.
With Donald Trump having secured the 2016 Republican Party Presidential nomination after his two remaining primary opponents, Texas Senator Ted Cruz and Ohio Governor John Kasich, suspended their campaigns on the heels of Trump’s dominating win in the Indiana Primary, Trump’s campaign has now switched its focus to preparing for his likely Democratic opponent in the general election, former Secretary of State Hillary Clinton. Clinton needs to secure only a modest number of delegates in the remaining state primaries to ensure the Democratic nomination and avoid a contested convention with Vermont Senator Bernie Sanders.
In a past life, I worked as a political reporter for a daily news outlet in Michigan, so I’ve seen my fair share of divisive candidates and issues. I can’t say, however, that I’ve ever seen two candidates as polarizing or as widely despised by opponents as Trump and Clinton. Whether it’s Trump’s at times bombastic rhetoric and status as an outsider to the Republican establishment, or Clinton’s missteps with Benghazi or her private email server during her time as Secretary of State, it’s clear that neither candidate is immune to criticism.
While the two differ greatly on a wide variety of issues, their positions on health care reform should be watched closely in the lead up to the November general election. Clinton had made it clear she considers the Affordable Care Act a success that should be expanded on – albeit with a number of adjustments. Trump, on the other hand, has stated he would repeal Obamacare, but only recently has offered concrete details as to what a potential replacement might look like.
With Trump, voters aren’t being sold on a specific health care vision, but are instead being offered a promise of reform many Republicans have called for since 2010: repealing Obamacare. Make no bones about it, Trump has made abolishing the controversial law a focal point of his campaign, going so far as to state on his campaign website that “On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare.”
Let’s take a look at the other areas of health care reform Trump mentioned in March when his team released a seven-point plan that attempted to give backbone to his health care vision. In the plan, Trump pledged to:
- Abolish the ACA mandate requiring individuals to purchase health care.
- Allow individuals to make tax-free contributions to health savings accounts that would accumulate indefinitely and could be passed on to heirs without penalty.
- Allow individuals to fully deduct health insurance premiums from their tax returns.
- Modify laws to allow the sale of health insurance across state lines in hopes that increased competition will drive down costs.
- Convert Medicaid into a block-grant program to allow states to manage Medicaid without federal oversight.
- Allow protections for those with pre-existing conditions to remain intact.
- Relax regulations to allow cheaper drugs from overseas to enter the American market and require “price transparency” from all health care providers.
Financials: Trump’s plan to repeal and replace Obamacare is estimated to cost $330 billion over a 10 year period when including estimates of faster economic growth, according to Congressional Budget Office data analyzed by the nonpartisan Committee for a Responsible Federal Budget. Conversely, when using conventional scoring, his plan is estimated to cost $550 billion. Furthermore, the group’s analysis shows repealing the ACA would raise the number of uninsured Americans from 27 million to 49 million by 2017, while only 1.1 million new enrollees are expected to be gained by allowing carriers to sell across state lines. However, CFRB notes Trump could create potentially creates hundreds of billions in savings through his plan to block-grant Medicaid, although it’s currently impossible to project the direct financial impact of that proposal without further details.
Rough 10-year cost estimate of major proposals: $330 to $550 billion.
Voice for: “If Mr. Trump intends to generate aggressive savings (up to $915 billion based on some projections) from block granting Medicaid, it could more than pay for the cost of repealing and replacing Obamacare — though perhaps at the cost of a further reduction in coverage,” — Committee For a Responsible Federal Budget (May 9, 2016). “Analysis of Donald Trump’s Healthcare Plan”, Fiscal Fact Check 2016.
Voice against: “Combining the ACA’s insurance regulations (which forbid factoring in health status of individual consumers when setting premiums) with complete freedom to enter and exit the market at will is a recipe for an insurance market implosion. Consumers would wait until they needed insurance to buy it, driving up premiums and making coverage unaffordable for many people with chronic conditions. It would never work.” — James Capretta (April 21, 2016). “Donald Trump’s Empty Health Care Promises”, Real Clear Health.
Takeaway: While some experts have predicted the abrupt repeal of the ACA could send health insurance companies scrambling to raise premiums and out-of-pocket costs to support an infrastructure built for a larger population and entirely different model of health care, Trump suggests that his proposals for immigration reform, among other things, would help further ease the country’s health care burden.
“Providing healthcare to illegal immigrants costs us some $11 billion annually,” Trump states in his plan. “If we were to simply enforce the current immigration laws and restrict the unbridled granting of visas to this country, we could relieve healthcare cost pressures on state and local governments.”
He also goes on to suggest lowering unemployment and addressing the country’s economy as a whole will play a key role in his health care vision.
But, by providing only a narrow outline of a health care plan to work with, Trump has thus far made predicting the impacts of his promises a difficult task. The truth is, while he has to offer some concrete details and proposals to satiate an educated population of voters, Trump knows he’ll do better with the average conservative voter by hitching his wagon to repealing Obamacare and leaving the gritty details of establishing its replacement to be sorted out after the election.
Unlike Sanders, who attempted to excite voters with ideas of a government funded single-payer system (ie: Medicare for all), Clinton is embracing Obamacare while hoping she can remedy the broken parts of the system threw a slew of minor changes. Primarily, Clinton is aiming to address rampant out-of-pocket costs and improve patients’ coverage overall.
- Create a tax credit of up to $5,000 for people whose out-of-pocket health care costs add up to more than 5 percent of their annual income.
- Extend ACA access to all families, regardless of immigration status.
- Ensure individuals eligible for tax credits will pay a smaller percentage of their income by enhancing existing premium tax credits available through the exchanges. Families purchasing on the exchanges will have premiums capped at 8.5 percent of their annual income.
- Increase enforcement of existing ACA requirements for health insurance companies, such as those dealing with the disclosure of payment and pricing policies.
- Dedicate $500 million to Medicaid and exchange outreach efforts.
- Require health plans to cover three sick visits a year without having to meet a dedutible.
- Fix the “family glitch” to allow families to purchase insurance through exchanges when their employer’s family plan is too expensive.
- Waive out-of-network fees for “true emergencies.” (Although what exactly would constitute a true emergency hasn’t yet been made clear.)
- Prevent drug companies from deducting marketing costs from their taxes and require those companies to make a minimum investment in research and development.
- Repeal the Cadillac Tax on high-cost health insurance plans.
- Offer new incentives to encourage states to expand Medicaid.
- Make it more difficult for health insurance companies to merge.
- Continue to push value-based reform.
Financials: The CFRB has estimated Clinton’s plan to limit premiums on the health care exchanges, increase premium subsidies for individuals on the exchange, fix the “family glitch” and expand federal support for cost sharing would cost roughly $230 billion, while her proposal to offer full federal Medicaid to states who haven’t enacted Obamacare expansion is estimated to cost another $30 billion. Additionally, the committee estimates her plan to spend $500 million in Medicaid and exchange outreach efforts would cost $5 billion in direct spending and would lead to $25 to $50 billion more in subsidy costs for new enrollees. Finally the cost to repeal the Cadillac Tax is estimated to cost roughly $100 billion.
Rough 10-year cost estimate of major proposals: $390-$415 billion.
Voice For: “The Affordable Care Act is still in its infancy. Although the law passed in 2010, the mandates that are key to its reforms only went into effect within the last two years. It was also severely hampered when the Supreme Court ruled against the mandatory Medicaid expansion in 2012. However, even with all the mistakes the administration committed during the law’s implementation and the other setbacks and delays it has faced, it has succeeded in decreasing the numbers of the uninsured. Gaps in coverage remain, but as Clinton suggests, the successes of the law can be built upon to shrink those gaps. There is no need to dismantle what is already working.” — Cary Gibson (Feb. 12, 2016). “Clinton Gets It on Health Care”. U.S. News & World Report.
Voice Against: “Clinton is reluctant to take on a healthcare industry that has paid her more than $2 million in speaking fees. And she knows that tightening the health law’s screws would be toxic in a general election. So, instead, she has proposed incremental half-measures that will have no meaningful impact on the cost of Obamacare-sponsored health coverage.” — Avik Roy (April 15, 2016). “Hillary Clinton’s Healthcare Plan is Just as Impractical as Bernie Sanders’”. Forbes.
Takeaway: Voters who are satisfied with the current health care landscape, but who also see room for improvement are most likely to be attracted by Clinton’s proposals. She is essentially saying that while the ACA is the foundation she wants to build upon, she believes the law is largely toothless in its current state. Clinton’s hope is that additional government oversight and regulation along with the continued push toward value-based care and quality metrics will lead to increased accessibility and drive down costs for consumers. Only time will tell if this imperfect system can be fixed.