Trump’s Health Care Non-Policy

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This post was going to be solely focused on Donald Trump’s proposal to “repeal and replace” the Affordable Care Act. Then I heard him assure his supporters yesterday that Hillary Clinton will be indicted for her alleged crimes as Secretary of State. That reminded me that trying to discuss policy issues in this election year is largely an exercise in futility. Trump is not running on policy proposals, but mostly on anger. He is running the most negative presidential campaign in recent memory, mobilizing the anger many Americans feel about the state of the country and channeling it against his opponent. She is to blame for everything that’s wrong with the world, from the loss of manufacturing jobs to the rise of ISIS, including the rigging of this election. Somehow it’s all part of one big criminal conspiracy.

Trump’s personal style, which I described in an earlier post as loud, combative, self-aggrandizing, politically incorrect, and autocratic, makes him the perfect candidate to run such an ugly campaign. His temperament encourages Clinton to base her own case for election largely on his unfitness for office, further turning the campaign into an exchange of insults rather than a discussion of issues.

I will do two things here: first, describe Trump’s health care proposal, but only briefly; and second, comment further on Trump’s mobilization of popular anger.

Repeal and replace Obamacare

Running true to form, Donald Trump seems more interested in blowing up the existing system than replacing it with anything better. His proposals are simplistic, not demonstrating much understanding of the health insurance challenge.

The Affordable Care Act (ACA) was a response to the national embarrassment that millions of Americans were unable to obtain health insurance. Usually that was because they were excluded by some preexisting condition, or because their income was too low to afford the premiums. The ACA was designed to meet a dual goal: on the one hand provide adequate insurance coverage for more people, and on the other hand subsidize premiums in order to make that insurance more affordable. Private insurers had to improve coverage by accepting people with preexisting conditions at no extra charge, observing federal caps on out-of-pocket costs, and providing a standard range of benefits. The law included  a mandate requiring individuals to carry insurance or pay a tax penalty, as well as a mandate on large employers to offer group plans. The mandates are supposed to generate enough premium payments from currently healthy people to cover good benefits for the sick without raising premiums too high. The government helps defray the cost by expanding Medicaid coverage to those slightly above the poverty level (those with incomes between 100% and 133% of the official poverty threshold), and by providing private insurance subsidies for those with incomes up to 400% of the poverty level. The Supreme Court upheld the mandates, but allowed states to opt out of the Medicaid expansion, which many did, even though the federal government would pay almost all of the cost.

Many observers recognized from the beginning that the success of the ACA depended on getting people who are young and healthy but uninsured to sign up. Otherwise, insurers wouldn’t find it profitable to offer health insurance to all without raising premiums too high. This year, premiums for insurance sold on the state exchanges are going up, at least partly for that reason. Many progressives see that as an argument to add a public option for everybody, so that people will not be so dependent on for-profit insurers. (Few countries rely as heavily on private insurers as the United States does.) Conservatives prefer to end Obamacare and rely primarily on the free market to provide coverage.

Donald Trump is in the latter camp. “By following free market principles and working together to create sound public policy that will broaden healthcare access, make healthcare more affordable and improve the quality of the care available to all Americans.” (That’s not a proper sentence, but you get the idea.) We shouldn’t forget, however, that when Obama was elected, the public was clamoring for health care reform precisely because the free market was failing to provide adequate health insurance at an affordable cost for millions of people.

With the Affordable Care Act repealed, Congress would have to go back to square one to figure out how to cover the uninsured at a price they can afford, if legislators were even interested in that goal. Trump’s proposal makes no mention of requiring insurers to cover people with preexisting conditions, or requiring insurers to provide a standard range of benefits. Quite likely, insurers would once again be free to provide little or no coverage to many Americans.

As for making insurance affordable, The ACA’s subsidies would disappear, to be replaced in Trump’s plan by tax deductions for health care premiums. Health care premiums are tax-deductible for businesses now, and they become deductible for individuals too when total medical expenses exceed 7.5% of adjusted gross income. Trump’s plan would make them fully deductible. It would also let individuals put money into tax-sheltered Health Savings Accounts for future medical expenditures. The problem with this is that tax deductions are most valuable to higher-income people who pay the highest rates of income tax. Low-income people wouldn’t get enough back from taxes to offset much of the cost of insurance. The plan helps the people who can already afford insurance more than the ones who can’t.

Obamacare’s expansion of Medicaid, which provides insurance to people with incomes up to 133% of the poverty level, would be replaced by something much vaguer: block grants to the states. Presumably, the federal government would give a sum of money to the states and let them figure out how to finance adequate care for their low-income citizens. Whether states would rise to the occasion and do this very well is anybody’s guess. My guess is that some would and some wouldn’t.

Trump has one more idea for making health insurance more affordable: letting insurers offer health insurance across state lines. Traditionally, insurers have to be licensed in each state where they sell policies. That allows state insurance commissions to set standards, although it can also make policies more expensive in states that set the highest standards. Free-market theory holds that deregulating health insurance would allow more insurers to offer policies in more states, increasing competition and lowering prices. Critics of such deregulation fear a “race to the bottom,” because companies could get their policies approved in states with the weakest consumer protections, but then sell those policies anywhere. Avoiding that would require strong federal standards applying to all states, but free-market conservatives generally oppose those as well. With the widest range of policies to choose from, young healthy people might save money by shopping for the cheapest policy, once again depriving quality insurers of the premium dollars they need to extend coverage to sicker people at a reasonable price.

We already know that for-profit insurers, left to their own devices, can provide health insurance for the wealthy and the healthy. To devise a plan that works for the poor and the sick is the challenge that Donald Trump has hardly begun to tackle. Hillary Clinton and Barack Obama have been working on it for years. Neither of them may have come up with the perfect system, but at least they know what they are doing.

The mobilization of anger

To understand how Donald Trump can generate so much support without being more qualified for the presidency, one needs to understand how much his supporters are driven by anger. One reason is the downward economic mobility of non-college-educated men because of the loss of good manufacturing jobs to automation and globalization. However, downwardly mobile white men are not a large enough group to account for Trump’s popularity, and their preference for the Republican candidate in this race was not at all inevitable. Many of them would have been happy to vote for Bernie Sanders if he had gotten the nomination. While most Republicans have supported free trade, concern for its impact on workers has come more from Democrats like Sanders and Elizabeth Warren. Although Trump boasts about bringing new voters into the G.O.P., he owes his success more to the existing Republican base, most of whom are not downwardly mobile and have other issues than bringing back coal mining jobs.

What Trump has done to be competitive in this race is tap into a much larger source of anger, consisting mainly of conservative resentment that progressive ideas have been gaining traction. From a conservative perspective, the Reagan Revolution should have created a permanent conservative utopia, with free markets, limited government, low taxes, minimal business regulation, and a Christian conservative moral agenda hostile to gay rights and feminism. Public opinion, however, has been shifting on most of these issues, with at least small majorities supporting higher taxes on the wealthy, more financial regulation, campaign finance reform, national health insurance, reproductive choice, same-sex marriage, and a path to citizenship for undocumented immigrants. When conservatives see the country slipping away from their control on many fronts, they get upset.

That helps explain why the Democrats who followed Reagan and Bush into the presidency were unusually vilified. In the 1990s, the Clintons were accused of many forms of wrongdoing, some mildly plausible, others less credible. Bill Clinton was investigated by special prosecutor Kenneth Star, initially for real estate dealings in Arkansas and the death of White House counsel Vince Foster. When Star could not find any crimes there, he turned his attention to Clinton’s sexual relationship with Monica Lewinsky. More recently, Donald Trump led the effort to delegitimize the Obama presidency by questioning his citizenship, and Congressional Republicans investigated Benghazi to death without proving serious wrongdoing by Hillary Clinton. The public never entirely went along with these fishing expeditions. Despite the effort to impeach him, Bill Clinton left office with relatively high approval ratings, as did Hillary Clinton after being Secretary of State. As will Barack Obama.

Under the leadership of Donald Trump, the conservative backlash has become more frenetic. Now we hear talk of endless investigations and possible impeachment before a candidate has even been elected. Trump and his supporters have found Hillary Clinton guilty before she’s even been charged with anything. Their closing argument is that the only way to avoid a constitutional crisis is not to elect her. We have reports of Trump supporters within the FBI trying to use investigations and leaks of investigations to influence the election, whether or not any actual crimes have been committed. I am hardly the first to suggest that these tactics put our democratic institutions at some risk.

Yesterday we had a call for greater civility from, of all people, Melania Trump! (Hopefully civility, like charity, begins at home.) By all means, let’s have more civility, but civility is more than just being nice to one another; it is a matter of allowing the democratic process to work and respecting the results.

 

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