When Donald Trump first began campaigning for president, he responded to questions about health care with generalities that made conservatives very, very nervous. He told 60 Minutes, for instance, that he would replace Obamacare with “something terrific,” that “everybody’s going to be taken care of,” and that “the government’s gonna pay for it,” all of which sounded oddly like some sort of socialized medicine. (It didn’t help that he called his thinking “un-Republican.”) But as Trump dribbled out more details, his “amazing system” started to look more and more like a boilerplate GOP replacement for Obamacare.
Wednesday night, Trump finally released his full health care plan, and it should finally put the right at ease. With just seven bullet points—one of which is devoted to the tangentially related subject of prescription drugs—it’s barely an outline. But it does confirm that the superlative-spewing Republican front-runner is toeing the party line on yet another major policy issue.
In fact, Trump’s proposal—what there is of it, at least—actually seems to be on the more vicious end of GOP Obamacare replacements. Like other Republicans, he would start by repealing the Affordable Care Act entirely, then change federal regulations in order to let insurance companies sell coverage across state lines to (theoretically) create more competition and help customers shop for the cheapest possible plans.1 Then, to help households pay for insurance, he would allow Americans to fully deduct premiums from their taxes. This is meant to make buying health care as an individual more like buying it as company, since corporate health benefits aren’t taxed. But for all of Trump’s populist blather, this is actually more regressive than the more standard Republican approach of offering families a tax credit, as Marco Rubio has argued for.
There are a few reasons why. With a tax credit, the government can choose to give everybody the same fixed amount of help (especially if it’s refundable, meaning that if it exceeds what you owe in taxes, you get the rest back in cash to spend on insurance). Or, the government can also make the credit progressive, by offering more assistance to poorer families, which is Obamacare’s current approach. But if Washington simply makes all premiums deductible, as Trump would, then less wealthy families who have to buy inexpensive coverage will end up getting less help, since they’d be subtracting less from their IRS tab. So a successful personal injury lawyer who buys a premium plan for his whole family will receive a bigger subsidy from the government than a freelance carpenter who’s trying to pinch pennies by purchasing a frugal catastrophic coverage plan. Beyond that, deductions won’t do much good at all for the many lower-income families who already pay very little in the way of federal income taxes. That group could end up in special trouble since Trump would eliminate Obamacare’s Medicaid expansion, which extended government coverage to many adults just above the poverty line.
But that’s probably not the worst part of Trump’s proposal. As of now, his blueprint doesn’t explain how it will guarantee that people with pre-existing conditions will be able to obtain health insurance. Obamacare, of course, bans insurers from denying coverage to people because they have been sick, as was common before health reform. But whereas other Republicans have talked about using subsidized high-risk insurance pools to accomplish similar ends, Trump simply takes away the ACA’s protections and leaves a giant asterisk in their place. “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,” his outline states. “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 right. It’s all TBD. Wonderful. Amazing. Terrific.
Beyond that, Trump, would turn Medicaid into a state block grant—it wouldn’t broaden coverage but would help along the Republican goal of decreasing the federal role in health care—expand health savings accounts, and demand more “price transparency” from health care providers, which is fine, but probably not that helpful, given how awful people are at shopping for medical services.
In the end, Donald Trump has produced an Obamacare replacement plan that might indeed horrify a few Republicans after all—but only because it does so little, not so much.
1 So, this needs a massive caveat. Trump’s language here is so muddled that it’s a little hard to tell exactly what he’s trying to accomplish, if anything at all. Most Republican plans call for letting Americans buy insurance anywhere in the country so that they can shop in states where regulations allow health care companies to sell less comprehensive, less expensive insurance. If Alabama wanted to let insurers sell skimpier coverage that cost a pittance, and New York didn’t, New Yorkers could then go buy health insurance in Dixie. It’s not obvious how much that would actually lower costs, but that’s the thinking. However, Trump’s website says his plan would, ”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.” As the Week’s Jeff Spross pointed out on Twitter, this sounds a lot like it would still require any insurance plan to meet the regulatory requirements of the state where it is sold, which would entirely defeat the point of letting people shop across state lines, and kind of suggests that Trump just thinks customers need more choices between insurers. I assumed this was just a garbled way of saying insurers still would have to meet regulatory requirements of the states where their plans are based, which is, again, Republican boilerplate. But when I asked the Trump campaign for a clarification, a spokeswoman simply emailed: “The plan speaks for itself.” Sadly, it does not, and I have to leave open the possibility that the thing is utter nonsense, rather than merely ungenerous.
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