The Republican presidential candidate says his seven-point plan would provide more choice at more affordable rates, but critics say it would create chaos.
Imagine this scenario next year.
In January, President Donald J. Trump asks Congress on his first day in office to repeal Obamacare.
The House and Senate oblige and eight months later on Oct. 1 the Affordable Care Act (ACA) goes out of business.
In its place, the seven-point healthcare plan listed on the Trump campaign website is implemented.
What happens then?
The Trump campaign says their plan would spur more competition, lower insurance rates, and eventually lead to more employees signing up for their own individualized plans rather than companywide policies.
“It will make the healthcare industry more affordable and more accessible,” Sam Clovis, the national co-chairman and a policy advisor for the Trump campaign, told Healthline.
However, five experts interviewed by Healthline don’t see quite as rosy a picture.
Although they see merit in some of the plan’s individual components, they foresee higher rates, more uninsured people, and a climate that ranges from uncertainty to havoc to total chaos in the healthcare market.
“We as a nation would go backward,” said Ron Pollack, executive director of Families USA, a nonprofit healthcare consumer organization. “They [the Trump campaign] have precious little understanding of how the healthcare industry works.”
“There will be collision and chaos. It won’t be a pretty sight,” predicted Thomas Miller, a health economist at the American Enterprise Institute and co-author of the book “Why Obamacare is Wrong for America.”
“It’ll cause dislocation and trauma to the healthcare system,” added Robert Laszewski, a former insurance executive who is now president of Health Policy and Strategy Associates, LLC. “It’s a bunch of loose, stupid, disavowed, half-baked ideas. A bunch of junior high kids could have done better.”
The Trump plan eliminates the individual mandate, allows insurance companies to sell policies across state lines, turns Medicaid into a state block grant program, and lets foreign companies sell prescription drugs approved by the Food and Drug Administration (FDA) in the United States.
It relies heavily on the virtues of the free market as well as the assumption the economy will grow robustly. It also counts on undocumented immigrants being kept out of the country and, consequently, out of our healthcare system.
To better understand what would lie ahead in a Trump healthcare world, Healthline presents a look at the main provisions in the soon-to-be Republican presidential nominee’s plan and what the experts think of them.
The Trump proposal on Obamacare is pretty clear.
It states Congress must “completely repeal” the healthcare law and eliminate the individual mandate that requires people to sign up for health insurance or face financial penalties.
“Not everybody needs to have health insurance,” said Clovis. “Healthy people having to pay the insurance costs of unhealthy people is a nonstarter.”
Clovis said, however, a Trump administration would consider keeping the portion of the law that allows children under the age of 26 to stay on their parents’ insurance.
He said they would also consider keeping the provision that prohibits insurance companies from rejecting applicants simply because they have pre-existing conditions.
The experts have a number of problems with this scenario.
First, they said, eliminating Obamacare leaves 12 million people who signed up under the law looking for new coverage. It could also affect the 12 million people who gained coverage under the expanded Medicaid rules in 32 states.
There could also be some shifting as people who lose coverage try to switch over to their spouses’ plans.
Needed for Success: Growing economy, immigration enforcement
The experts said there would probably be millions of people who can’t afford insurance because the subsidies under the ACA would be gone.
“There would be enormous losses in coverage. People would be scrambling to find coverage,” said Dr. Georges Benjamin, the executive director of the American Public Health Association (APHA).
They also predict insurance premiums will go up. The reason, they say, is simple.
Without an individual mandate, healthy younger people will be less likely to buy insurance. These folks cost insurance companies less money because they don’t require a lot of medical services.
They’re needed to balance the higher risk, more costly people with pre-existing conditions that insurance companies would be required to accept.
“If you don’t have a balanced pool,” said Pollack, “you’re going to have premium rates that are going to escalate tremendously.”
“It would create havoc in the marketplace,” added Kurt Mosley, vice president of strategic alliances for health consulting firm Merritt Hawkins.
“It would blow up the insurance industry,” commented Laszewski.
Clovis said the Trump campaign doesn’t see things unfolding this way.
He said they expect the economy to expand enough under a Trump administration so that a significant percentage of people will find jobs and leave the Medicaid program or no longer need to find insurance on their own.
That will, he said, reduce the number of higher risk people who insurance companies take on with individual plans.
“We hope that our economy will be so good that we’ll be able to reduce these costs dramatically,” Clovis said.
He added that providing healthcare to undocumented immigrants in the United States costs $11 billion a year. Enforcing immigration laws will cut into that expense, too.
The second component of the Trump health plan is to allow any company to sell insurance in any state as long as the plans meet the requirements of those states.
Clovis said this free market approach would provide more competition, giving consumers more choices and lower premiums.
He said the vendors would have to offer policies that meet the minimum requirements in each state. People could buy the basic package or add enhancements.
“It’s like buying a car with options,” he said.
Needed for Success: Willing companies, coordination
Mosley thinks the idea has some merit. He said you could buy a lot of items, including cars, across state lines, so why not health insurance.
Miller also thinks the program could work and lower premiums if states and insurance firms can coordinate the logistics.
Others, however, see problems.
Laszewski said insurance companies would seek out states with the most lax restrictions. He said that would drive up rates because healthy people would pick stripped down policies from less regulated states while people with higher health risks would have to buy more expensive policies elsewhere.
“It’s the dumbest idea ever hatched,” said Laszewski. “It’s a backdoor proposal for insurance companies to cherry-pick.”
“Unless the packages are the same, you may not be buying apples and apples,” he said. “I personally think it would reduce competition.”
The third and fourth segments of the Trump plan are designed to encourage younger, healthier people to purchase insurance.
One proposal allows consumers to take the full price of their premiums off their income taxes, much like businesses are allowed to do.
The other is to allow health savings accounts (HSAs) to become part of a person’s estate and be passed on to heirs.
Needed for Success: Consumer interest
Clovis said the policies are the right thing to do, and they would give people incentives to purchase insurance and keep it.
“They’re incentives if people think in the long term,” he said.
Mosley thinks these proposals might indeed encourage more people to sign up.
“If employers can do it, then why can’t individuals do it,” he said.
The other experts, though, find this claim a bit of a stretch, saying the reduction in income taxes is still far less than the premiums would cost, so healthy consumers would still save money by not purchasing insurance.
“There’s not enough of a tax break to make a big difference,” said Miller.
The skeptics also added that the tax breaks would benefit only higher-income people who pay higher premiums and higher taxes.
“People who make the least would get the least help,” said Pollack. “It’s standing on its head what needs to happen.”
On the HSA proposal, the experts pointed out that most of these accounts would probably be minimal when inherited because the estate owner would have been retired and not putting money into them for a number of years.
Another component of the Trump plan is to change Medicaid from a federal program into a state block program.
Under this scenario, the federal government would give states Medicaid money to spend as they see fit.
Clovis said this would put the money in the hands of state officials who know better what residents need.
Needed for Success: Fewer recipients, state oversight
He said other programs, including Temporary Assistance to Needy Families, are done through state grants and they seem to work just fine.
“I don’t fully understand why block granting money to the states is an evil thing,” he said. “The states have a better idea about their people.”
“States know better. They can manage it better,” he said.
Miller also finds some merit but only if the funding keeps up with the need.
“That would give us an anchor, although not a great one,” he said.
Clovis also dismisses as a “false premise” the idea that the federal government will have to keep increasing the grants every year.
He goes back to the notion that an improving economy will reduce the Medicaid rolls.
Others, however, don’t think much of the idea.
Pollack said the program is simply a plan to reduce federal spending.
“It would be a disaster,” he said.
Benjamin and Laszewski also don’t see the math adding up.
“Over time, the money does not grow,” Benjamin said.
The final provision in the Trump plan would remove barriers for foreign pharmaceutical companies to sell drugs in the United States that are “safe, reliable, and cheaper.”
Clovis said the FDA would oversee the imports to make sure the overseas medications are quality products.
“We never said the FDA wouldn’t have a role,” he said. “The products would have to be safe or we won’t sell them in this country.”
Needed for Success: Strict FDA oversight
Clovis said the open market would increase competition and lower prices.
“We want to look at the grip the pharmaceutical industry has on the United States,” he said.
Once again, Mosley sees some merit in the idea but only if the FDA assures consumers of the quality of the imported drugs.
Miller noted this is an idea proposed in the past by Democrats.
“It’s the first sign of support for a free trade policy Donald has ever embraced,” Miller said. “It’s easy to talk about but difficult to implement.”
Pollack doesn’t have a serious problem with the idea as long as there is strict FDA oversight.
“I think it’s sensible. I don’t think it’s a bad thing to do,” he said.
The pharmaceutical industry, though, is not a fan of this legislation.
In an email to Healthline, officials at the Pharmaceutical Research and Manufacturers of America (PhRMA) said the federal government has repeatedly stated in the past it cannot guarantee the safety of drugs brought in from other countries.
“Ensuring patient access to needed treatments is critical, but the importation and sale of unapproved medicines will not help American patients and their families,” said Holly Campbell, PhRMA senior director of federal/policy communications. “Without proper FDA oversight and enforcement of laws designed to protect patient safety — which the importation of prescription medicines undermines — these products could infiltrate the U.S. pharmaceutical supply chain, with life threatening consequences.”
Overall, Clovis says, the Trump plan would use the free market to increase choices and lower rates.
He envisions a day when employees are not relying on employer-paid insurance plans. Instead, they will purchase individual policies that are better suited to them and can be taken with them from job to job.
“The plans would be totally portable,” he said. “They’d be much more individualized.”
The experts aren’t so sure.
They see higher rates and mass confusion on the horizon.
“When there is a situation when everything is up in the air,” said Miller, “people wonder what’s coming next and that’s not good for any market.”
They also predict people without insurance will once again use hospital emergency rooms as their doctor’s office. They’ll also wait until they are seriously sick before going in, undermining the preventative care doctrine in Obamacare.
“Hospitals will see their emergency rooms refilling,” said Pollack.
He also worries hospitals, particularly rural ones, will go out of business as they provide care they don’t get fully reimbursed for.
Whatever happens, Mosley hopes elected officials keep consumers in mind when making decisions.
“Healthcare in America is not left or right. People get sick regardless,” he said. “We can’t let patients suffer.”
Officials in the presidential campaign of Democrat Hillary Clinton did not respond to Healthline requests for an interview for this story.
Officials at the American Medical Association, the American Academy of Pediatrics, the Kaiser Family Foundation, and Kaiser Permanente declined requests for interviews.