The Donald’s Healthcare “Reform” “Plan”

Yesterday Donald Trump unveiled his 7-point Health Care Reform Plan which can be found here. The terms “reform” and “plan” should be used loosely when referring to this proposal.

1. Completely Repeal Obamacare for the purpose of eliminating the individual mandate.  

Duh.

2. Modify existing law that inhibits the sale of health insurance across state lines. As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state. By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.

He doesn’t have to repeal Obamacare to permit this to happen. Just modify it. Waste of tax dollars and not ‘reform’.

Insurance companies continue to be regional monopolies. After ACA implementation, Blue Cross Blue Shield of Delaware was bought out by Highmark Blue Cross Blue Shield out of Pittsburgh. Rather than become a competitor in the ‘free market’, one bought the other and there was no resulting increase in competition and corresponding cost decrease. Ask some UD employees what the State of Delaware did to their healthcare premiums after Highmark took over. “Prices went down” will probably not be the response you get.

3. Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn’t Congress allow individuals the same exemptions?

The overwhelming majority of Americans receive their medical benefits through their employer. Employers can deduct 100% of their share of the premiums. Employees have 100% of the their share of the premiums deducted pre-tax. Self-employed individuals can already deduct 100% of all medical & dental costs. Individuals purchasing insurance out of pocket may deduct all medical-dental expenses (including premium payments) that exceed 10% of their adjusted gross income. Some people who purchase plans on the exchange qualify for additional tax credits.

The option to contribute to an HSA pre-tax and use those dollars to purchase health insurance also exists. So who is Trump specifically targeting with this point?  Wouldn’t it actually be more cost-transparent to decouple insurance from employment and wouldn’t that help expose the ridiculous pricing schemes? Maybe he doesn’t want  that level of transparency.

Then something weird happens. Originally embedded in his third point is the following:

3A. As we allow the free market to provide insurance coverage opportunities to companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance. We must review basic options for Medicaid and work with states to ensure that those who want health care coverage can have it.

That’s a really odd place to insert that language as it doesn’t really tie to the first part of Point #3 but there’s a reason it’s buried in there. Wait for it.

4. Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate. These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty. These plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans. These funds can be used by any member of a family without penalty. The flexibility and security provided by HSAs will be of great benefit to all who participate.

The IRS already allows for HSAs for people covered by high deductible/low premium insurance plans and contributions accumulate over time with no expiration. HSAs are also transferable tax-free to spousal beneficiaries on the insurance plan the HSA is associated with. The only time an HSA is taxed is if the beneficiary that takes ownership of the account is not a spouse or a withdrawal is made for something that isn’t a health care related expense.

So in other words, he wants to do what we already do. Not ‘reform’ and could also be done without ACA repeal.

5. Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.

Oh. Ok, so he does want price transparency. This might only help people without insurance. Anyone with insurance already has these prices negotiated for them as part of their premium payments, but: a hospital, doctor’s office or other clinic will quote you fees for service if you ask. -AND- larger providers like hospitals can and do negotiate over price if you have no insurance. The better option for a provider is always to get some payment rather than no payment at all. Many doc-in-a-box clinics already have their prices posted on the premises and online. So I’m not sure how this is ‘reform’ either.

6. Block-grant Medicaid to the states. Nearly every state already offers benefits beyond what is required in the current Medicaid structure. The state governments know their people best and can manage the administration of Medicaid far better without federal overhead. States will have the incentives to seek out and eliminate fraud, waste and abuse to preserve our precious resources.

There it is. The only reason I can think of for putting point 3A where it is in the proposal is to try obscure its relationship this point. Block grants are something Republicans have been trying to accomplish for decades. Right now, the Federal gov’t foots a percentage (say 60%) of a State’s Medicaid costs. The number of people qualifying for Medicaid has been increasing since ACA took effect. If a State’s Medicaid costs rise from $100 million in year 1 to $200 million in year 2 the Feds still pay for 60%. Block grants fix the dollar amount the federal gov’t pays no matter what the State’s costs are. Take the example I just gave. If $60 million is block granted the State’s share is still $40 million in year 1, but it balloons to $140 million in year two as more people qualify for Medicaid.

Notice how he claims that States know their people the best. While true, States also know their budgets. Booting Obamacare & converting to a block grant system would kick millions of Americans off Medicaid because as we know with Delaware, unless you raise revenue you can’t pay for rising costs. States would be forced to drastically cut funding for Medicaid expenses.

What segments of the American population utilize Medicaid services? Exactly. This is nothing more than a shoddily-veiled attack on health care access for poor, disabled, and elderly Americans. And you know if we get a block grant Medicaid system, we’re going to eventually get block granted Medicare and Social Security systems.

7. Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.

The pharmaceutical industry is a hot mess rife with price gouging and patent abuse but many of our drugs already ARE produced overseas and brought into the US, something many people don’t notice because prescriptions come repackaged in little amber vials. Many of the stock bottles those drugs come in have in their fine print something like this: “Made by Pharmacorp, India for DrugCo, USA”. We already have several multinational pharmaceutical companies in the US, many of which gained that status by purchasing or being purchased by foreign drug companies yielding what amounts to an oligopoly in the pharmaceutical market. What in this plan would stop future mergers from pushing the oligopoly toward monopoly status? Nothing as far as I can see.

TL;DR- Repeal Obamacare, kick poor people off Medicaid, shift costs to states, do a bunch of stuff Obamacare did, keep doing other stuff already do, construct another illusion of “free markets” in an oligopoly, further incentivize future mega-mergers for insurance companies and pharmaceutical companies in the “free market”, and block grant Medicare and Social Security.

The guy who Republicans are screaming is “not a Republican!” sounds a lot like, well, a Republican.