As I have previously written in this space, Donald Trump’s health care plan is by no means perfect. It is, on the other hand, self-evidently superior to Obamacare or the dystopian medical delivery system that Hillary Clinton would inflict on the nation if the voters are foolish enough elect her President. Last week, the Center for Health and Economy (H&E) validated this in the first detailed analysis that has been done on the proposal. According to the study, the Trump plan would “decrease average insurance premiums in all categories between 24 and 37 percent relative to current law by 2026.”
H&E estimates that, in addition to decreasing premiums over the next decade, the Trump proposal would reduce the federal deficit by $583 billion and increase provider access by 11 percent. The downside of the plan, according to the study, is that it will probably lead to a decrease in the number of insured Americans: “By 2026, this number is expected to be 13 million fewer than under current law.” The obvious reason for this decrease is that the Trump plan would repeal Obamacare along with the individual mandate that forces many Americans to buy costly insurance they don’t want.
It will come as no surprise that most of the coverage given to this study by the “news” media has focused almost exclusively on the decreased number of insured Americans that H&E estimates would accompany enactment of Trump’s plan. The following headline from U.S. News & World Report is all too typical: “Study: Trump health care plan would make 18M uninsured.” This headline is misleading in at least two ways: It uses a short-term projection while ignoring the less sensational ten-year estimate quoted above and it insinuates that the proposal would brutally kick millions off plans they actually like.
In reality, most Obamacare enrollees are deeply dissatisfied with the plans they have been forced to buy. A recent Kaiser survey showed that 54 percent rate their coverage as only “fair” or “poor.” Most would probably drop their plans today if not for the individual mandate. It’s also useful to recall what most Americans wanted from health care reform in the first place. In July of 2009, Gallup conducted a poll concerning what Americans considered to be the primary goal of reform and got the following result: “The public says, by 52% to 42%, that controlling costs is more crucial than expanding coverage.”
The ironic implication of these surveys is that Trump’s health care plan, warts and all, would come nearer to giving the voters what they wanted from reform than they got from Obamacare. The H&E study doesn’t speak directly to that issue, of course. It attempts to model the effects of the proposal’s enactment based on five of its implicit provisions: Repeal of ACA, reversion to the state “regulatory structures” that existed prior to the law’s passage, allowing individuals to deduct premiums on their tax returns, permitting the sale of health coverage across state lines, and block-granting Medicaid funds to states.
This was no mean feat considering the lack of specificity for which many, including yours truly, have faulted Trump’s plan. The sale of coverage across state lines is a good example: “The effects of such an adjustment will vary greatly depending on the details… the Proposal is vague on the specifics of this provision.” H&E handled this by making certain (small “c”) conservative assumptions about implementation: “The central estimates in this report reflect a moderate approach to promoting the sale of insurance across state lines, and as such reflect moderate reductions in premiums due to the provision.”
The study’s authors are in less speculative territory in calculating the budget effects of the Trump plan: “In its analysis of the Proposal’s impact on the federal budget, H&E looks only at provisions directly related to health insurance coverage.” For example, they included the individual and employer mandate taxes, but didn’t include the medical device tax. They delineate the sources of funds ($728 billion) and the uses of funds ($1.307 trillion) to arrive at their deficit reduction estimate of $538 billion over 10 years. Readers with pronounced masochistic tendencies will find these figures in Table 9.
And for those with exceptionally high pain thresholds, tables 6 and 8 provide the data used to arrive at H&E’s estimates relating to provider access. The study’s authors summarize their access projections as follows: “Under the Proposal, average provider access is projected to increase relative to current law due to an increase of enrollment in catastrophic coverage plans that commonly offer a wide choice of providers relative to plans with lower cost-sharing but narrow networks.” The study’s modest 2 percent projected increase in medical productivity (Table 5) is related to the same market dynamic.
The essence of the H&E study is that the basic components of Donald Trump’s health care plan: the elimination of Obamacare as well as the introduction of market competition and consumer choice will inevitably produce a less expensive and more efficient health care system than we have at present. And it would certainly be better than the “Sanders Lite” proposal that Hillary Clinton rolled out over the weekend.