Trump’s health plan folly
Would leave 21 million uninsured and create a $270-500 billion budget hole
ON MARCH 14, the Committee for a Responsible Federal Budget (CRFB), a bipartisan federal budget watchdog group, released an economic analysis of the recent health proposals made by Republican presidential candidate Donald Trump. Their key findings:
“Donald Trump’s plan to repeal and replace Obamacare would cost nearly $500 billion over a decade, or $270 billion incorporating economic growth.
“The plan would nearly double the number of uninsured, causing almost 21 million people to lose coverage.”
To my knowledge, this is the first serious and independent economic analysis of any Republican or conservative health reform plan released since the Affordable Care Act (ACA) was signed in 2010. It’s not a pretty picture.
In addition to “completely repeal[ing] Obamacare,” Trump’s proposal would:
- Allow sale of health insurance across state lines;
- Allow individuals to fully deduct health insurance premiums from their income tax obligations;
- Allow individuals to use Health Savings Accounts;
- Require transparency from all health care providers;
- Block grant Medicaid to the states;
- Remove barriers to entry into free markets for drug providers.
None of these proposals is novel and, indeed, most of them are standard material in most Republican and conservative ACA replacement plans. That makes the CRFB proposal all the more important because this is the closest we have to an overall verdict on the prevailing and consensus Republican plans for Obamacare “repeal and replace.” And the verdict is tens of millions of newly uninsured Americans and hundreds of billions of dollars added to the federal deficit.
Using Congressional Budget Office (CBO) data, CRFB says 22 million currently insured Americans would lose coverage by repealing the ACA, and that less than 5 percent of those (or 1 million) would get coverage back from the Republican replacement provisions, for a net coverage loss of 21 million.
In terms of costs, making individual coverage tax deductible would cost about $100 billion over 10 years, while allowing insurance to be sold across state lines and allowing reimportation of prescription drugs would save about $30 billion. But the big items relate to ACA repeal; while eliminating the Medicaid and subsidized private health insurance expansions would save $1.12 trillion over 10 years, the repeal of the ACA’s tax increases and Medicare savings would cost the federal government $1.54 trillion. The overall 10-year net cost of Trump’s plan would be $490 billion, and about $270 billion when calculating the economic impact.
For the fifth time in five years, a Republican Congressional task force is hard at work trying to figure out how to frame a replacement health reform proposal following repeal of the ACA, a challenge that has frustrated them since Obama signed the ACA into law. Trump’s agenda mirrors the safe and conventional proposals advanced by Republicans across the map. Now there is a credible benchmark against which to measure their proposals – no more free rides.
Until the release of his health plan two weeks ago (after Sen. Marco Rubio lambasted his lack of any health plan in a debate), Trump had done a skillful tease about his views and intentions. At times, he praised the single payer health systems of Scotland and Canada; at other times, he threatened the drug industry with federal negotiated pricing; at still others, he talked about how he was different from other Republicans because he didn’t want Americans “dying on the street.”
By the way, if you wonder who are these folks on the Committee for a Responsible Federal Budget, take a look at the CRFB’s board of directors. Credible and responsible Democrats and Republicans with serious federal budget and fiscal experience, both elected and appointed.Thanks to CRFB for putting not just Donald Trump but the entire Republican establishment on notice. No more hot air on your replacement plans – or lack thereof.
John E. McDonough is a professor of practice at the Harvard TH Chan School of Public Health. He blogs at healthstew.com