The future of the U.S. health care system will depend a great deal on whether President Donald Trump wins reelection or former Vice President Joe Biden defeats him, and the contrasts between Trump’s record and Biden’s aspirations make the stakes plain.
Although Biden, a Democrat, isn’t campaigning in favor of anything as dramatic as “Medicare for All,” it’s hard to overstate the differences between his vision for American health care and Trump’s.
Like his fellow Republicans, Trump wants to repeal the Affordable Care Act and for the government to do less about the cost and the availability of decent coverage. Biden wants to preserve and build upon the 2010 law also known as “Obamacare” and enlarge the government’s role in making health care more accessible and affordable.
Either man’s agenda would depend on outside political forces.
Trump is counting on the Supreme Court to eliminate the law, and has faced legal challenges to many of his health policies. Many of Biden’s key proposals, such as the creation of a government-run public option as an alternative to private health insurance, would run into staunch opposition from industry groups. And both face the prospects of a split Congress, with Democrats controlling the House and Republicans controlling the Senate, or a majority in the Senate not large enough to overcome the filibuster.
Biden’s Plan: Making The Affordable Care Act More Affordable
In 2010, when President Barack Obama signed the Affordable Care Act, Biden famously called it a “big fucking deal.” Although Biden’s campaign proposal doesn’t live up to that standard, it’s closer than most people probably realize.
Biden’s plan consists of several interlocking provisions designed to fortify and expand the Affordable Care Act, mainly by spending more government money to help people get insurance and creating a new, government-run insurance plan open to anybody. Biden would also let the federal government negotiate directly with the pharmaceutical industry over the price of drugs, and he’d lower the Medicare eligibility age to 60.
The complexity makes it tough to explain and it doesn’t envision the sort of wholesale transformation that would come with Medicare for All, the proposal to replace existing insurance arrangements with a single government-run plan. Under Biden’s plan, some Americans still wouldn’t have insurance and some of those with coverage would still struggle with high out-of-pocket costs.
But, as a whole, Biden’s proposal would represent one of the largest expansions of health coverage in American history.
One reason is a provision that has gotten very little attention because it’s somewhat technical: A set of policy changes designed to improve the affordability of insurance available through HealthCare.gov and state-run “exchanges” like the Maryland Health Connection and Your Health Idaho.
Right now, people who buy coverage through the exchanges can choose from a range of policies, from cheap “Bronze” policies that cover relatively little to expensive “Platinum” policies that cover nearly everything. The Affordable Care Act also discounts premiums, through a system of tax credits, with a goal of making sure anybody can get a “Silver” plan for no more than about 10% of their income.
But the tax credits cut off once household income hits four times the poverty line ― which, for a family of four, works out to about $105,000 a year. And Silver plans aren’t that generous: They cover roughly 70% of the typical person’s medical costs, which means they can have deductibles of several thousand dollars.
Insurance under these circumstances can be very expensive or flat-out unaffordable for some people at higher-middle incomes, especially those in their 50s or early 60s who are charged higher rates.
The Biden plan would redefine “affordable” as 8.5% of income, rather than nearly 10%; extend that guarantee to everybody, not just people with incomes below four times the poverty line; and peg the subsidies to gold plans, which offer coverage pretty similar to what typical employer plans do.
That is a lot of moving parts, but it could add up to some very big savings, as a report from the Henry J. Kaiser Family Foundation recently showed. Today, for example, a 60-year-old living alone and making $50,000 would not qualify for subsidies; nationally, the average monthly premium for a Gold plan with a $1,500 annual deductible is $1,029.
Under the Biden plan, monthly premiums for that same Gold plan would be just $354. That’s 66% lower ― or, to put in more concrete terms, the difference between paying more than $12,000 a year for insurance and just a little more than $4,000.
Biden would also open subsidized plans to all Americans. That’d be a big change from the Affordable Care Act, which opens subsidized plans only to people who can’t get an affordable employer plan.
The ACA defines “affordable” as premiums below roughly 10% of income. But many retail workers, security guards and other low-wage workers can’t afford to put 10% of their income toward health insurance. Worse still, the method of calculation can make it especially difficult to get spousal or dependent coverage.
This is called the “family glitch,” and it effectively means there’s no cap on what some families could spend on health care.
With the Biden plan, 12.3 million Americans with employer coverage ― including those who fall into the family glitch ― could save money with subsidized coverage, according to the Kaiser Family Foundation projection.
The Return Of The Public Option
People buying coverage in the exchanges would also have a new way to get insurance: through a new government-run insurance plan. This is basically the “public option” that liberals had desperately wanted the ACA to include, partly because they believed it would use the government’s pricing power to pay less to the providers of medical care than private insurance does.
It’s not clear whether the public option Biden envisions would actually offer that better deal, because he hasn’t provided enough details on how it would work. But, at the very least, it could be the foundation for a bigger plan in the future, one that really did use government pricing power to get better deals from doctors and hospitals. It could then pass along lower premiums to enrollees.
The public option would serve another vital function: as a fallback for Medicaid. The ACA expanded the federal-state program for low-income Americans, opening it to anyone whose income is below or just above the poverty line. Millions have gotten care that way and, as a large body of research has shown, the result has been better access to care, reduced financial hardship and better health outcomes.
But Republican officials in a dozen states still haven’t expanded Medicaid eligibility, even though the federal government picks up nearly all of the cost. An estimated 4.7 million adults who would be eligible remain uninsured.
Biden’s plan would enroll these people into the new public option automatically. That’d make a huge difference, especially in big states like Florida, Georgia and Texas that have not embraced the expansion.
Tradeoffs And Costs
Health policy is all about tradeoffs, and the Biden plan has its share. With the Biden plan in place, it’s likely that the number of people with employer-based insurance would fall and the number of people with subsidized coverage (including the public option) would rise.
But it’s important to be clear about who these people are ― and why they’d be moving. For the most part, experts say, it’d be low-wage workers who will be moving voluntarily, because subsidized insurance would be much cheaper.
And while it’s possible employers could drop coverage on their own, few experts expect that to happen anytime soon. Among other things, businesses still see health benefits as a useful way to lure and retain workers, especially the higher-paid workers who wouldn’t get much of a subsidy and thus wouldn’t save money by switching into the exchanges.
The other, clearer tradeoff is the price tag to the federal government. The 10-year cost of Biden’s plan would be $850 billion, according to an estimate from the Committee for a Responsible Federal Budget. That is a lot of money and it will have to come from somewhere.
But any money the government would be spending on health care would largely displace money that individual Americans are already spending. Overall, national health care spending would probably come down slightly, according to the Committee’s estimate, thanks in part to lower spending on drugs once the federal government starts negotiating directly with drugmakers over what they charge.
And the new government spending would buy something important: An expansion of insurance to around 95% of the population, with more generous insurance overall for those who have coverage.
Trump’s Record: Repeal And Don’t Replace
Trump campaigned on grandiose promises of “terrific” health care. “People are going to be able to go out and negotiate great plans with lots of different competition with lots of competitors with great companies and they can have their doctors, they can have plans, they can have everything,” he said on “60 Minutes” in September 2015.
Trump hasn’t changed his tune much since then. “Republicans will be providing far better Healthcare than the Democrats, at a far lower cost...And will always protect people with Pre-existing conditions!!!!” he posted on Twitter Oct. 13.
In truth, Trump has never thought past repealing the ACA and still has no coherent health care agenda. He and congressional Republicans failed to repeal it in 2017 and haven’t tried again. But Trump’s Justice Department backs a lawsuit brought from a group of state Republican officials to achieve the same outcome, a case the Supreme Court is due to hear one week after Election Day. If the plaintiffs win, the entire law could disappear, along with health coverage for an estimated 21 million people. Companies could also deny coverage to people with preexisting conditions once again.
Although Trump hasn’t been able to kill Obamacare yet, his administration has taken a number of steps to undermine its programs, as well as Medicaid. He declared early in his presidency that he would make the ACA “fail.” On his watch, the uninsured rate has risen and the number of uninsured children is at a decade high.
Trump has proposed or imposed policies that have weakened the ACA’s health insurance marketplace, limited access to Medicaid for low-income people and sought ways around the ACA’s guarantee that people with preexisting conditions be allowed to buy health insurance at the same rates as everyone else. Many of these policies are tied up in legal battles, and courts have blocked others.
Two years ago, Trump halted payments to insurers that cover the poorest policyholders, making the process of buying coverage more confusing and causing insurers to increase premiums (although, for convoluted reasons, some subsidized policyholders wound up with cheaper coverage anyway). The same year, Trump slashed the budget for public outreach about the insurance sign-up period and enrollment counselors.
During his presidency, Trump has broadened access to insurance policies that don’t meet the ACA’s standards for essential benefits and can reject people with preexisting conditions or at least charge them more, such as short-term plans and association health plans, and he has encouraged states to adopt similar policies.
On Friday, for example, Georgia Gov. Brian Kemp (R) announced the Trump administration will approve his plan to block Georgians from using HealthCare.gov and send them to insurance brokers instead, where they will see not only ACA-compliant plans but also junk insurance. The plan also would impose work requirements on Medicaid enrollees.
As many as 100,000 people could become uninsured as a result of Kemp’s plan ― although, here too, the judicial branch may have something to say about it, particularly the work requirements federal courts have rejected in other states.
Targeting Medicaid
In January, Trump revived an idea that has been popular with Republicans for years: converting Medicaid from an entitlement program with open-ended funding into a “block grant” that caps annual spending. The administration touted the “flexibility” this allows states to redesign their programs.
The actual effect of these budget caps, however, would be to limit benefits and reduce access to Medicaid because states wouldn’t have enough federal funding to continue their current programs.
Trump’s other big Medicaid initiative was to allow states to impose burdensome work requirements on some Medicaid enrollees, despite the fact that the vast majority of those who are physically able to work already are employed. Sixteen states have asked for permission to set up work requirements since 2018. Courts have thus far blocked work requirements in several states and others have postponed implementation, so no one currently is subject to these requirements.
But during the seven months Arkansas carried out the policy, nearly one-quarter of those who had to abide by the rule lost their benefits. Studies show the policy didn’t increase employment, but it did lead to higher medical debt.
Smoke And Mirrors On Preexisting Conditions
Trump talks a lot about drug prices, but the policies he’s either put in place or that are pending will have little impact. And those that may, such as capping Medicare copayments for insulin, do so by raiding the Medicare trust fund. Others, like Trump’s plan to allow Americans to purchase cheaper medicines from Canada, don’t actually do anything. Some of his drug policies are still in the planning stages and others would have minor effects for few people
In September, Trump abruptly announced that his administration would deliver $200 prescription-drug gift cards to every Medicare enrollee. It’s a bald attempt to use taxpayer money to bolster this reelection prospects among older Americans, who polls show favor Biden. Although the cards likely won’t arrive until after Election Day ― if at all ― beneficiaries are slated to receive letters informing them that Trump will give them $200. The legality of this move is highly suspect, even to the administration’s own lawyers.
Trump can, however, claim some actual successes. The 2017 tax bill eliminated the fines associated with the much-hated individual mandate that required most U.S. residents to obtain health coverage or pay a tax penalty. And a previous bill repealed the unpopular, but never actually implemented, “Cadillac tax” on the value of the most expensive health insurance policies, as well as taxes on health care companies.
The Trump administration also carried out some consumer-friendly reforms, such as permitting pharmacists to tell patients when there’s a cheaper drug available and requiring hospitals to publish the prices they charge for procedures. The administration also established a widely praised new system to care for Medicare enrollees with end-stage renal disease.
As for what a second Trump term might bring, more of the same seems likely. Last month, Trump gave a speech on health care and signed executive orders for his “America First Healthcare Plan,” which isn’t so much a plan as a collection of slogans and untruths.
The most glaring example is Trump’s claim that the order makes protecting people with preexisting conditions the “policy of the United States,” despite his ongoing attempts to eliminate it and his record of undermining those protections.