Trump's Health Care Plan Ain't Worth Much
I just had a look at Trump's skinny-down health care plan. Here's my summary:
1. Repeal Obamacare
2. Kick out undocumented immigrants
3. ???
4. Enjoy awesome health care!
There's a bit more in there, some of which is good, some of which is terrible, and most of which is beside the point.
Block granting Medicaid -- turning it over to the states with a fixed funding amount -- is a great way to surgically remove its critical countercyclical function: its ability to expand to meet increased need in recessions. In fact, in the last downturn, the feds helped states a great deal by ramping up DC's share of their Medicaid bill.
There's some mysterious stuff in there about allowing "individuals to use Health Savings Accounts (HSAs)." Um...they already can.
Similarly, his "idea" to allow you to deduct premium costs from your taxes is at most redundant and otherwise a regressive waste. Employers already deduct employer health costs -- it's the biggest tax expenditure in the system. The self-employed can already do the same. Low income people don't incur a federal tax liability against which to deduct anything. The people who will benefit from this surely already have or can afford coverage. It's therefore just a wasteful giveaway.
He goes after big Pharma a bit -- there's his populist instincts coming through -- by allowing importation of cheaper drugs from abroad. Assuming quality control -- the importation of known, established drugs or generics -- that's a good idea. The key, however, will be allowing Medicare and Medicaid to purchase them.
There are a couple of other standard issue R ideas -- selling health insurance across state lines; price transparency. The former won't have much impact on anything and while the latter is obviously a fine goal, it's complicated by unique aspects of health care. Comparison shopping unquestionably saves money when you're buying a sweater from Amazon; less so when it's a hip replacement. One place where such transparency matters is in choosing a health care plan, and the Obamacare exchanges have made real advances in clear pricing and standardization. In fact, cost control is of course a key goal of Obamacare, and there's evidence that it has been effective.
Whatever. This campaign ain't exactly about policy. But any first-year public policy student who submitted this as their health care plan would be kicked out of school, if not deported.
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This post originally appeared at Jared Bernstein's On The Economy blog.
