President-Elect Donald Trump is going to take office in January. His website states that he is going to ask Congress to “immediately deliver a full repeal of Obamacare.”
With the White House, the U.S. Senate and House of Representatives all in the hands of Republicans, it’s not a question of if, and when, but how.
Congress already passed a bill to repeal the Affordable Care Act, but President Obama vetoed the legislation. That legislation was short on specifics of how the Act would actually be dismantled. One provision of note was that there would be a two-year transition period to give Congress and the new President time to craft an alternative.
If the stock market is any indication, drug companies are happy while hospitals are worried.
This past April, after candidate Trump began taking control of the Republican primaries, we published a story on the cost of, now, President-Elect Trump’s healthcare proposal. He has not added any new provisions since then. We are reprinting the story.
Note: The following article was first run April 4, 2016.
It’s time to take Donald Trump and his healthcare proposals seriously.
Trump is edging ever closer to the Republican nomination for president. As of March 31, 2016, he led his closest rival, Texas Senator Ted Cruz 736 to 463 in delegates to the Republican convention this summer. He needs 1, 237 to win.
There are another 1, 200 delegates to be capture in the remaining primaries. Cruz would need to beat Trump 2:1 for the remainder of the primary campaign to win.
Readers might remember Cruz leading the charge in the U.S. Senate in 2013 to shut down the government over Obamacare. We know about Hillarycare and Senator Cruz’s record about Obamacare speaks for itself.
But what about Donald Trump? What does he promise about healthcare if he is elected president?
Trump recently released a healthcare reform plan entitle “Healthcare Reform to Make America Great Again.” The plan seeks to repeal and replace the Affordable Care Act (Obamacare) and turn Medicaid into a “block grant” program.
If you are a deficit hawk, someone on the money end of orthopedics and healthcare or newly insured, you won’t like it.
Standard Republican Proposals
“Donaldcare” is mix of standard Republican proposals such as repeal Obamacare, sell health insurance across state lines, expand health savings accounts and block-grant Medicaid. Republicans in Congress have been kicking these ideas around for years.
Trump is no fan of insurance companies. Last August he said he’d like to see a private system without the artificial lines around every state. “I have a big company with thousands of employees. And if I’m negotiating in New York or New Jersey or California, I have like one bidder. Nobody can bid. You know why? Because the insurance companies are making a fortune because they have control of the politicians. They’re making a fortune. Get rid of the artificial lines and you will have yourself great plans. And then we have to take care of the people that can’t take care of themselves. And I will do that through a different system.”
The non-partisan Committee for a Responsible Federal Budget (Committee) reviewed candidate Trump’s healthcare proposals for that different system and found his proposal to repeal Obamacare would likely cost nearly $500 billion over ten years and almost double the number of Americans without health insurance.
The Committee is truly non-partisan and made up of such elders as former Republican Senator Alan Simpson and other former federal officials known for trying to balance the national books. Click here to see the list of directors.
The Cost of Repeal
The largest component of the Committee’s budget estimate comes from the “complete repeal Obamacare” proposal as stated on Trump’s website.
The Committee assumes Trump proposes to repeal all of Affordable Care Act’s regulations, subsidies, Medicaid expansion, Medicare savings, and tax increases.
“Although repealing the coverage provisions would save about $1.1 trillion, based on Congressional Budget Office (CBO) estimates (adjusted for recent legislation and changes in the budget window), repealing the legislation’s tax increases and Medicare cuts would cost a combined $1.5 trillion. In total, this means repeal would cost $420 billion—or $200 billion including the economic benefits of repeal.”
In a nutshell, Trump’s proposal saves $1.1 trillion in future tax expenditures, but gives up $1.5 trillion in future tax revenue.
Source: CRFB calculations based entirely on various CBO estimates for the independent pieces. All estimates are very rough and rounded to the nearest $10 billion. Interactions or interest costs not included.
There would be further costs in Trump’s plan.
He would create a tax deduction for individuals buying their own health insurance. According to the Committee, this would equalize the tax treatment between individually-purchased and employer-purchased health insurance, “but at a cost of roughly $100 billion over ten years.”
The cost of Trump’s plan would partially be offset by savings from expanding prescription drug importation and re-importation and allowing people to purchase insurance across state lines. The Committee says that Trump’s proposals to require price transparency and promote health savings accounts will “likely have small effects in opposite directions, roughly canceling each other out.”
The Committee notes that its analysis does not include Trump’s call to negotiate aggressively for Medicare drug prices, a policy not listed on his website. Trump has previously claimed that $300 billion a year could be saved through negotiation. That dog didn’t hunt with the Committee because Medicare will only spend an average of $111 billion each year on prescription drugs. “Based on previous estimates by CBO, actual savings would likely be small or negligible.”
Insurance Coverage Implications
The CBO estimates that approximately 27 million Americans will still lack health insurance coverage in 2018. Repealing Obamacare would increase that number by about 22 million. Trump’s plan, according to the Committee, would only increase current coverage by 1.1 million. “In other words, the plan would increase the number of uninsured individuals by about 21 million and only cover about 5% of individuals that would lose coverage from Obamacare repeal.”
The 1.1 million of added coverage would come from allowing insurance companies to sell policies across state lines, which would, says the Committee, increase coverage by 400, 000, and the deduction for individual health insurance, which would increase coverage by 700, 000.
Trump’s proposal did not account for his call to require insurance companies to cover individuals with pre-existing conditions. Such a requirement without penalties or subsidies would, according to the CBO, further increase the number of uninsured individuals.
Block Granting Medicaid
The federal government currently pays for a portion of state Medicaid costs. In fact, the feds pay for over 90% of state Medicaid costs for states that expanded coverage under Obamacare. Trump would give each state a fixed allotment of dollars each year.
The amount of savings (or cost) is of course dependent on how much the feds ship back to the states. The grants could be designed to maintain current spending or slowly reduce spending. Unfortunately, Trump does not provide any information on the size of his proposed block grants.
The Committee ran their own hypothetical block grant spending formula. They assumed block grants would be offered at current levels (minus Obamacare expansion) in 2017, but then indexed to grow more slowly. Indexing block grants to per-person Gross Domestic Product would only save $25 billion over the next decade; freezing block grants in nominal dollars would save nearly $850 billion.
States Are On Their Own
If Trump plans to generate big savings from block granting Medicaid, he could more than pay for the cost of repealing and replacing Obamacare. However, the states would end up picking up the tab if they want to serve the indigent, grannies in long-term care and help their providers and hospitals pay for the inevitable emergency care that would come with all their uninsured residents.
The Committee concludes that these changes are for the most part in addition to Trump’s other policy proposals, which the Committee estimates would cost between $12 and $15 trillion, driving debt to somewhere between 115% and 140% of the economy in ten years. “As the campaign proceeds, we hope that Mr. Trump will present additional policies to pay for his proposals and put debt on a more sustainable path.”
Trump Speaks
But before you think that Donaldcare has no heart. The candidate himself talked about his views about healthcare during a January 31 interview on ABC’s This Week.
Trump said, “If somebody has no money and they’re lying in the middle of the street and they’re dying, I’m going to take care of that person.” When chief anchor George Stephanopoulos pressed Trump to describe how he would accomplish that, Trump said he would “work something out.”
“We’re going to work with our hospitals, ” he said. “We’re going to work with our doctors. We’ve got to do something. You can’t have a – a small percentage of our economy, because they’re down and out, have absolutely no protection so they end up dying from, you know, what you could have a simple procedure or even a pill. You can’t do that.”
“We’ll work something out, ” Trump went on. “That doesn’t mean single payer.”
“And if this means I lose an election, that’s fine, because, frankly, we have to take care of the people in our country. We can’t let them die on the sidewalks of New York or the sidewalks of Iowa or anywhere else.”
In a February town hall meeting in South Carolina, Trump said, “Now, the new plan is good. It’s going to be inexpensive. It’s going to be much better for the people at the bottom, people that don’t have any money. We’re going to take care of them through maybe concepts of Medicare. Now, some people would say, ‘that’s not a very Republican thing to say.’ That’s not single payer, by the way. That’s called heart. We gotta take care of people that can’t take care of themselves.”
I’m not smart enough to make a prediction on all the schemes on providing more for less. We are then forced to play the reimbursement game with each competitor and provider trying to maximize their bottom line.
My position is that there are many ways to treat spinal pain with what I refer to as ” surgical Pain Management” using minimally means of decompression the disc and foramen and combining that with thermal ablation of the offending nerves without creating additional problems.
those who are competing in this space has various levels of training, and almost none have been trained in an academic center with trained faculty. Most successful transforaminal endoscopic surgeons are privately trained or self trained by intense motivation after they learn over time what works and what doesn’t and become successful because of their results. I perform all my surge iris under local anesthesia and sometimes with out sedation. Just doing that is extremely cost effective because the surgeon mainly relies on his surgical skills, aided by instrumentation that make the process easier and easier. To shorten the learning curve and make surgery more predictable, successful, I believe the interest in intro-operative Imaging combined with Robotics to get the perfect trajectory for decompressing, and ablating the pain generators will do a lot to provide affordable care to more for less.
Too many surgeries already. Exercise and CBT are the way to treat most Orthopedic conditions.