This week, President Donald Trump and Democratic presidential nominee Joe Biden will square off in Cleveland for the first of three debates.
The two candidates will have no shortage of disagreements to air, but one subject in particular is sure to receive significant attention—health care. From the pandemic response to the future of the Affordable Care Act in the wake of U.S. Supreme Court Justice Ruth Bader Ginsburg’s death, health care will be on the minds of many voters when they cast their ballots this fall.
Democrats have historically held an advantage on the issue. But Biden’s reform plans are the most radical his party has ever outlined—and would upend the U.S. healthcare system. That offers an opportunity for Trump to go on offense before outlining his own ideas for improving American health care.
Given the former vice president’s integral role in passing Obamacare, he will no doubt condemn Trump’s efforts to dismantle the law—and to portray himself as the candidate best suited to improving our health sector.
Trump should have no trouble rebutting this line of attack. Obamacare was supposed to expand access to affordable coverage while reducing America’s uninsured rate. It’s failed on both counts.
Thanks largely to Obamacare’s cost-inflating insurance market regulations, health plans are now out of reach for a growing share of the country. Virtually the only people shopping on the individual-market exchanges are getting paid by the government to do so. Those who earn up to 400% of the Federal Poverty Level, or $104,800 for a family of four, are eligible for federal subsidies to help cover the cost of their premiums. This year, 86% of exchange enrollees received such subsidies.
The number of non-elderly Americans without coverage increased for two consecutive years between 2016 and 2018. When asked why they lack health insurance, 45% of the uninsured cited the high cost of coverage.
Biden’s current healthcare vision is based on the same misguided premises that doomed Obamacare. This includes the belief that the more people who are insured through the federal government, the better. Whereas Obamacare expanded Medicaid to millions of able-bodied, working-age adults, Biden’s plan would make all Americans 60 and older eligible for Medicare.
Biden also wants to give federal subsidies to people with incomes up to 600% of the Federal Poverty Level to use to purchase exchange coverage. That means families of four with incomes of up to $157,200 would be eligible for taxpayer-funded health insurance.
He’d also create a public insurance option available to all Americans, including those whose employers offer coverage, through Obamacare’s exchanges. Low-income patients who don’t qualify for Medicaid would be enrolled in this public option automatically and free of charge, with no premiums or deductibles.
Biden envisions that the public option would pay providers rates similar to Medicare’s—which are much lower than those for private insurance. According to a new RAND study, private insurers pay hospitals 247% more than Medicare does.
Thanks to this artificially low-cost structure, the public option would be able to set premiums well below those of private insurers. People would understandably drop their private policies in favor of public ones. Even those with employer-sponsored insurance might decide that the public option was a better deal. Employers might similarly nudge their workers to purchase the public plan, so they wouldn’t have to cover the cost of their employees’ health care.
Such a mad dash into the public option could leave private insurers without any customers. In short order, the government-run public option would become the only option.
What Biden refuses to see, and what Trump can point out, is that the federal government is a manifestly incompetent provider of coverage. Despite systematically underpaying healthcare providers, Medicare’s Part A hospital insurance trust fund will be insolvent in just four years.
Medicaid, which now covers nearly 67 million Americans, may be no better than going without insurance. According to a 2013 study published in the New England Journal of Medicine, “Medicaid coverage generated no significant improvements in measured physical health outcomes” for a group of people in Oregon that received public coverage, compared to similarly situated folks who were uninsured.
But Trump must do more than expose the folly of Biden’s healthcare plans. He’ll also need to present his own vision for health care—one in which affordability and choice are the overarching goals.
He could point to his administration’s work making short-term limited-duration insurance plans a feasible, low-cost alternative to exchange coverage. He can also highlight his efforts to allow small businesses and sole proprietors to band together to purchase coverage through so-called association health plans. And he can tout his efforts to expand Health Reimbursement Arrangements, which allow employers to give their employees tax-free funds they can use to purchase health coverage on the individual market.
These reforms are examples of an approach to health policy that Trump has yet to fully articulate. It is one that gives Americans the freedom to choose health plans that are appropriate to their needs and their means. And it is based on the principle that a market forces are the best way to expand access to affordable care.
Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All, (Encounter 2020). Follow her on Twitter @sallypipes.