Ethics & Public Policy Center

Donald Trump’s Empty Health Care Promises

Published in RealClearHealth on April 21, 2016


A sweeping victory in Tuesday’s New York primary has Donald Trump closer to winning the Republican nomination, but his campaign has been a substance-free zone since he announced he was running in June 2015. A crowded GOP field, poor follow-up questioning by the media, and a general circus atmosphere have allowed him to make broad and implausible statements about many matters — and to not be held fully accountable for what he says. This includes his disjointed and incoherent statements on health care.

Trump has said he wants to repeal the Affordable Care Act and yet still “take care of everybody.” He has said repeatedly that he is different from other Republicans in this regard, implying that other GOP politicians don’t want Americans to get needed health services. Of course, Trump has never bothered to back up this slander with any evidence (and the media haven’t bothered to ask him for it).

Trump is apparently unaware of the plans to replace Obamacare sponsored by Rep. Tom Price and by Sen. Richard Burr, Sen. Orrin Hatch, and Rep. Fred Upton. These plans would insure as many Americans as are enrolled today under the ACA at a fraction of the cost.

So does Trump have a better idea for “taking care of everybody” than these elected officials? His campaign released an outline of sorts last month that listed seven points. It is clear from this outline and other Trump statements that he has no idea how to improve health care in the United States, much less how to make it “great again.”

The first point of the outline is repeal of the ACA, including the law’s individual mandate. But Trump has also said in televised debates that he wants to keep the ACA’s protections for people with pre-existing conditions. His outline says nothing about how he would do this.

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.

Trump has said he wants to get rid of the entirety of the ACA, including subsidies for health insurance and its expansion of Medicaid. What does he propose instead to boost enrollment in health insurance by lower-income households? Essentially nothing. Trump proposes allowing Americans who buy health insurance on their own to deduct the premiums from their taxable income. But a deduction of this kind provides very little assistance to low-income households because most of them owe no federal income tax. Moreover, even those who do pay income taxes would gain very little from a new deduction because they are in the lowest income tax brackets. The ability to deduct a $5,000 premium would be worth only $500 to a family in the 10 percent tax bracket.

The campaign’s outline also endorses converting Medicaid into a block grant to the states. The plan does not indicate that this switch is intended to cut federal costs, but most block grant proposals have come with large federal savings. Either way, however, states would not be required to cover the same populations covered under today’s program.

Before any plan proposed by a Trump administration could be considered in the House or Senate, Congress would need to see estimates of its effects on federal spending and taxes as well as insurance enrollment. The Congressional Budget Office (CBO) and other independent analysts will conclude that Trump’s plan to eliminate the ACA’s subsidies, to roll back the Medicaid expansion and convert the program into a block grant, and to allow taxpayers to deduct the cost of health insurance they purchase on their own would increase the number of uninsured Americans by many millions of people.

Trump also says he wants to allow health insurance to be sold nationwide, without regard to state insurance regulations. Insurers approved in one state would be allowed to sell their products in other states as well. He seems to think this will revolutionize the insurance marketplace. It won’t. Many in the GOP favor this idea because it would put pressure on state regulators to eliminate unnecessary and costly coverage requirements in order to keep their insurance regulations in line with nationwide norms. This may cut costs a small amount. But most health care spending is driven by local practice patterns and local prices, not regulatory mandates. An insurance plan sold to someone in New York City will necessary reflect the cost of caring for patients there, even if the insurance was approved for sale in Kansas.

Trump also mentions that people should be allowed to enroll in Health Savings Accounts. His campaign seems unaware that there are many millions of people enrolled already in HSAs, which have been sold in their current form since 2004. There’s nothing in Trump’s outline that would suggest enrollment would accelerate under his plan.

The last item in Trump’s outline is support for the importation of drugs regulated and sold at prices set by other countries, particularly Canada. In interviews, Trump has often said he supports allowing the Medicare program to negotiate directly with pharmaceutical companies to reduce the costs of prescription drugs for seniors. At various points, he has claimed he could save $300 billion annually from such negotiations, even though Medicare only spends about $80 billion on drugs each year. But for some reason, that idea did not appear in the campaign’s health care outline. The irony of protectionist Trump proposing to open the border to the importation of cheap drugs from abroad seems to have been lost on the candidate and the campaign. Regardless, CBO has said this idea would have only a marginal effect on total health care costs.

The gap between what Trump is promising voters and his plans for actually delivering on those promises is immense. Voters have heard him say repeatedly that, if he is elected, there will be plentiful jobs, tax cuts, no federal debt, and no cuts in benefits. On health care, he said he will get rid of the ACA and take care of everybody with a better plan that will cost them nothing.

But what little Trump has actually proposed on health care would leave voters terribly disappointed. There would be more people without health insurance, and the insurance markets would be even more unstable than they are under the ACA.

Not that pointing this out will matter. Trump’s supporters seem determined to believe that he has a secret plan to fix everything, including health care, despite the mountain of evidence to the contrary.

James C. Capretta is a senior fellow at the Ethics and Public Policy Center and a visiting fellow at the American Enterprise Institute.

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