onald Trump has been extraordinarily vague on health care. To begin with, his standard line has been that he was going to repeal Obamacare and replace it with “something great.” On other occasions, he chose a more modest approach and instead promised to replace President Obama’s Affordable Care Act with “something very good.” As his campaign has progressed, he’s added a few details, such as allowing individuals to purchase health insurance across state lines and expanding the use of health savings accounts. Both are well within the mainstream of the best conservative reforms for health care. Ted Cruz lists both on his campaign website, and most conservative alternatives to the ACA include them.
But these alone are insufficient, to put it mildly. Marco Rubio mockingly pointed this out during the late February Houston debate by saying: “So, you’re only thing is to get rid of the lines around the states. What else is part of your health-care plan?” In his response, Trump seemed to confuse insurance plans, which would be affected by his proposal, with an overall health-care plan, in which purchasing across state lines should be part of a larger whole. He concluded his argument with Rubio by saying: “You get rid of the lines, it brings in competition. So, instead of having one insurance company taking care of New York, or Texas, you’ll have many. They’ll compete, and it’ll be a beautiful thing.”
The exchange revealed that Trump’s plan was, shall we say, lacking in detail. So perhaps it was no coincidence that less than a week passed before Trump released a more detailed health-care plan. It has some surface appeal. There are seven planks, including the Trump standbys: repealing Obamacare, allowing purchases across state lines, and using health savings accounts. To these, Trump added making health-insurance premiums tax deductible for individuals, promoting price transparency, reforming Medicaid into a block grant, and allowing for the re-importation of pharmaceuticals from other countries to sell at lower prices than those found in the United States.
With the exception of the last plank, all of them sound as if they could have come from the standard conservative health-care-reform playbook. As for drug re-importation, it is not surprising that Trump would go against standard conservative doctrine and opt instead for a populist element. The seven-point plan also seemed to soothe conservative heartburn by pointedly not including other Trump campaign positions such as maintaining Obamacare’s individual mandate and somehow saving the federal government $300 billion through direct negotiation of pharmaceutical prices (total spending in the United States on prescription drugs: $297 billion).
If all analysts had to go on was the listed policies in the paragraph above, one would assume that a candidate with such a plan was no deficit hawk, to be sure, but still a conservative in good standing, albeit with a populist edge. But there were additional details that vitiated such an assumption. On his core plank of allowing for the purchase of health care across state lines, he added the caveat that “the plan purchased [must comply] with state requirements.” In doing so, he subverted the whole purpose of the idea, which is to allow people in high-cost, high-mandate states such as New York to purchase cheaper plans in states such as Utah that do not impose as many costly coverage requirements on insurance plans sold in those states. With regard to his idea to “allow individuals to use Health Savings Accounts (HSAs),” that simply restates existing law.
Some of the other proposals are similarly flawed. Price transparency is a great thing, but it sounds as if Trump may be leaning on the heavy hand of government to mandate that worthy aim. And extending the tax deductibility of health care to individuals could bring about the equalization of tax treatment of health-care benefits between employer-sponsored care (which has long been tax deductible) and individually purchased care (which is not). Trump’s plan would make the tax break for individuals purchasing health care open-ended, costing the Treasury a great deal of money by effectively subsidizing individual health plans of any size.
The idea of allowing the re-importation of pharmaceuticals reveals a misunderstanding of the existing market for pharmaceutical products. The states that have tried it have had little success with it, it raises real safety concerns, and it would affect the development of new pharmaceutical products by damaging the profit motive for manufacturers. As I wrote in Commentary when the Obama administration was considering such a policy: “A study by the Task Force on Drug Importation convened by the Department of Health and Human Services found that the loss of profits caused by re-importation could lead to between four and 18 fewer drugs per decade. There is no way to know which promising enhancements would be lost.”1
The one Trump plank that conservatives could unreservedly support is the idea to block-grant Medicaid and lighten the federal government’s hand on state-based health-assistance plans. But getting such a proposal past Democrats in Congress is a non-starter, as long as there remains a 60-vote requirement in the Senate to overcome filibusters.
Overall, Trump’s health-care plan would need a lot of fixing before it could make health care great again.
1 “The End of Medical Miracles,” COMMENTARY, June 2009.