An Existential Threat To Healthcare

I have tried to avoid speculating about what Trump will or will not try to do during his term as President, because it is almost impossible to know. Of course, I fear the worst and I take him at his word on most of the things he ran on during the campaign. But I don't think anyone has a clue what he really wants to do, except for reducing taxes on the rich and regulations on business. On everything else, it is impossible to know if Trump really wants follow through. That doesn't mean that the Republicans in Congress will not be pushing a hard right agenda that will include restricting voting rights and gutting the safety net that has been built since the presidency of FDR, in addition to joining Trump in cutting taxes on the rich and business regulations.

So, rather than obsessing about his latest irrational tweets or speculating about who he is going to appoint, I've been pushing people to focus on what he actually does.  But it is hard not to be worried by his appointment of Tom Price as Secretary for Health and Human Services and what that could actually mean for the healthcare of all Americans. In yesterday's NY Times in the Upshot section, there was an article that pointed out that both Clinton and Trump both decried the high out-of-pocket costs for many insured under Obamacare. Clinton proposed a tax credit of up to $5,000 per family or $2500 per individual for those whose out-of-pocket costs exceeded 5% of their income. This proposal was paid for by new taxes and fees. According to the article, "Mr. Trump offered no specific plans for reducing out-of-pocket spending". Instead, he simply proposed repealing Obamacare altogether but never provided any coherent plan about how those 20 million people who had received insurance would actually stay insured. Now, of course, it would have been nice if the Times and the rest of the mainstream media had spent an inordinate amount of time exposing the country to this particular problem that would effect millions of Americans. Instead, we got lots of stories about the Clinton Foundation and EMAILS!

Tom Price, however, does have a plan for reducing out-of-pocket costs and, to be crude, it relies on a strategy that making healthcare unaffordable will, by definition, reduce out-of-pocket costs. If you can't pay for it, you will forgo it. The details of Price's plan are as follows. Insurers will still be required to accept patients with prior medical conditions AS LONG AS THEY MAINTAIN CONTINUOUS COVERAGE. This, he hopes, will force younger, healthier people to buy insurance because they fear they would not be able to get it if something terrible were to happen. I'm pretty sure that is a huge misread of human nature, especially for those who do not have a lot of money to begin with. The second part of his plan is subsidies, just like Obamacare. The difference is his subsidies are based on age and they are truly pitiful amounts. Price's subsidies range between $100 for younger people and $250 for older ones. This comes nowhere near covering the cost of a real health insurance policy. However it will pay for a typical junk plan, which will actually increase out-of-pocket costs if the insured really has a health emergency. And as Drum points out, "Since Price offers credits based on age, it means that the well-off all get tax credits. Many of the poor, who can't afford insurance even with the tax credits, will go uninsured and therefore get nothing. In other words, his plan is basically a way of subsidizing the rich and screwing the poor." But it will certainly reduce the cost of healthcare that the federal government is now carrying.

Price has a similar approach to Medicare and it dovetails with Paul Ryan's plan. The idea is to force Medicare recipients into private healthcare plans and then provide subsidies, in this case vouchers, to help defray the cost of that insurance. Under Ryan's proposal and just like in Price's Obamacare plan, the vouchers will probably be woefully insufficient, especially when you consider what private insurance would charge an ailing elderly patient. And Ryan's plan specifically increases the voucher over time at a rate that is LESS than healthcare inflation in an attempt to reduce that rate of inflation. But all it will really mean is that the voucher will buy less and less coverage over time.

Both of these proposals will actually increase out-of-pocket expenses for most Americans. But that is by design. Republicans claim that health consumers having a greater "skin in the game" will reduce the rising cost of healthcare because they will be more particular about what procedures they use. This is, of course, ridiculous because most of us have no ability to decide whether a specific procedure is "worth" it or not. I believe that is why doctors go to medical school. And poorer patients will obviously forgo procedures that they truly need simply to save money or because they can not afford it.

Bending the cost-curve of healthcare may be the Republicans' stated reason for their plans. But the real reason is that these plans will vastly reduce the amount of money that the federal government will have to pay for healthcare. And all those saving can go into massive tax breaks for the rich and business without totally busting the budget.

As I said at the top, the Trump administration has not yet put forward any proposals on either Obamacare or Medicare, so we will have to wait and see what actually is proposed. But it is clear that Republicans in Congress are putting on a full court press to reduce the federal costs of healthcare by passing the costs onto the consumer. And all those federal dollars saved will go back to the rich in massive tax breaks. And, for Trump, the tax breaks are probably the only thing he really cares about. With Price's appointment, Trump seems willing to go along with Congress' plans.

From a personal point of view, I wonder what all those people who voted for Trump with the belief that he shouldn't be taken literally on some of his promises are thinking now. Like the woman in Florida who is on Obamacare now but qualifies for Medicare next year. What will she think when her core Medicare coverage isn't free. Or the thousands in Kentucky coal country who have been insured under Kynect. What will they think when the subsidies don't even cover a quarter of their monthly premium. As a person who currently relies on Obamacare and hopes to be able to move on to Medicare when I qualify, I know that it will be very hard for me to forgive any Trump voter when those benefits are stripped away.