Consumer Power Report #498
A new study by the bipartisan Committee for a Responsible Federal Budget (CRFB) claims Republican presidential candidate Donald Trump’s plan to repeal and replace Obamacare is going to cost roughly $500 billion over 10 years and would cause 21 million Americans to lose their insurance coverage. A closer look reveals CRFB’s report is severely flawed and a wildly inaccurate depiction of Trump’s plan. A fair look at Trump’s proposals, called “Trumpcare” by many, shows the real estate mogul’s health care policies offer many good reforms that would help lower costs and improve the health insurance marketplace.
On a page featured on Trump’s website titled “Healthcare Reform to Make America Great Again,” Trump outlines seven broad health care reform proposals, including repealing Obamacare, allowing health insurance companies to sell policies across state lines, health insurance deductions, enhancing health savings accounts (HSAs), and block-granting Medicaid to the states. CRFB says taken together, these provisions will cost nearly $1.6 trillion and save only about $1.12 trillion, creating a $500 billion deficit. CRFB estimates the “dynamic effects” from economic growth related to repealing Obamacare would likely add another $220 billion in tax revenue, meaning the total cost of Trump’s plan under dynamic scoring is $270 billion.
The two most significant costs under Trumpcare, according to CRFB’s report, will be the repeal of Obamacare-related taxes and the Obamacare-mandated “Medicare savings,” which it estimates to be $880 billion. The most notable savings come from repeal of the federal subsidies for those purchasing insurance in an Obamacare health insurance exchange and the federal government’s share of Medicaid expansion.
CRFB’s report echoes the claims made by many critics of Trump’s health care proposals, which are very similar to those offered by other Republican presidential candidates and GOP members of Congress. There are several significant flaws with critics’ claims.
First, although CRFB acknowledges Trump’s plan to block-grant Medicaid to the states, which means states would receive a lump sum of money to use for their Medicaid programs in any way they choose, it doesn’t factor any potential Medicaid savings from this move. Toward the end of its report, CRFB acknowledges that block-granting Medicaid “could more than pay for the cost of repealing and replacing Obamacare – though perhaps at the cost of a further reduction in coverage.”
Even that claim is an incredible and important understatement. According to CRFB’s own estimates, which are based on projections made by the Congressional Budget Office (CBO), if block grants were set at current levels, growing with the inflation rate, Trump’s proposal could save as much as $470 billion over 10 years. If the growth of block-grant funds is tied to per-person spending, also tied to inflation, savings would be as much as $350 billion over 10 years. This means the net savings from Trump’s plan could be between $80 billion and $200 billion.
CRFB says that because Trump’s campaign has yet to provide the details of its Medicaid block- grant program, it can’t factor those savings into its estimates, but choosing to create any sort of an estimate without such an important piece of the puzzle is irresponsible and creates a totally inaccurate picture of what Trump’s plan, as well as the plans of many others who support repealing and replacing Obamacare, will actually look like in its final form.
A second significant flaw with CRFB’s analysis is that it relies on tax revenue estimates most analysts believe are very unlikely to come to fruition. For instance, CBO, which CRFB relied on to create its report, estimates the highly unpopular “Cadillac tax” on high-premium health insurance plans will generate $87 billion in tax revenue. This is problematic, because many budget, tax, and health care experts now believe the Cadillac tax will never actually go into effect. The Obama administration has already pushed the implementation date of the plan back to 2020 (from 2018).
Third, CRFB doesn’t factor into its estimates any potential savings that would result from Trump’s plan to improve health savings accounts, which could have a revolutionary impact on the U.S. health care system. Under Trumpcare, all Americans would be able to set up a health savings account. Contributions made to HSAs would be completely tax-free and could accumulate over time. Trump’s plan even allows individuals to pass on HSAs to their heirs – without any penalties. HSAs could be used to pay for health insurance or out-of-pocket health care expenses.
HSAs in their current, limited form have already produced notable savings. According to Heartland Institute Senior Fellow Peter Ferrara, “Total HSA costs, including the savings to fully fund the HSA savings account to cover the deductible, have run about 25% less than the costs for traditional, old-fashioned insurance.” If HSAs are significantly expanded under Trump or another presidential candidate, the U.S. health care system could be radically transformed, especially if health care price transparency laws are put into effect as well – also part of Trump’s plan.
Fourth, CRFB estimates Trump’s proposal will knock more than 20 million people off of their health insurance plans. That estimate is also inaccurate and irresponsible, because Trump’s Medicaid block-grant program would allow each state to decide exactly how to deal with people who are struggling to pay for health insurance. Further, because the details of Trump’s Medicaid block-grant plan have yet to be released, there’s no accurate way to judge its effects.
If free-market reforms such as those offered by Trump and other Republican presidential candidates and members of Congress are made into law, health care quality and costs will rapidly and remarkably improve, ushering in a new era of health and wealth.
— Justin Haskins
IN THIS ISSUE:
LEGISLATION OFFERED TO IMPROVE VETERANS’ ACCESS TO MENTAL HEALTH SERVICES
U.S. Rep. Tim Walz and several of his colleagues have introduced legislation aimed at ensuring veterans have access to the mental health care treatment they need.
The issue has been thrust to the forefront as more veterans with obvious medical histories of Post-Traumatic Stress Disorder and Traumatic Brain Injuries have been improperly discharged for minor misconduct rather than receiving a medical discharge or being retained in the military for treatment and rehabilitation.
The Fairness for Veterans Act ensures that combat veterans, whose condition should have been considered before their discharge, receive due consideration in their discharge appeals.
“After fighting for our country overseas, our warriors shouldn’t be discharged from the military without proper diagnosis or left without the care they need to reintegrate into the lives they once knew,” Walz, a 24-year veteran of the Army National Guard, said in a statement.
“We must act to ensure these brave men and women, suffering from invisible wounds, have the care and benefits they have earned.”
The proposed legislation creates a presumption in favor of the combat veteran during the post-discharge appeals process. If a veteran was deployed to a combat zone and diagnosed by a mental health professional as experiencing PTSD or TBI as a result of their deployment, the military’s Discharge Review Boards must consider this diagnosis with a rebuttable presumption in favor of the veteran.
SOURCE: By Mark Brunswick, Star Tribune (Minneapolis)
MAJORITY OF CONNECTICUT HOME HEALTH CARE AGENCIES EARN ‘AVERAGE’ OR ‘ABOVE AVERAGE’ GRADES
Two-thirds of Connecticut’s 99 licensed home health-care agencies provide average or above-average care, and 19 were rated below average, according to new Medicare five-star rating data.
Just one agency, McLean Home Care & Hospice in Simsbury, received the highest rating of five stars; three agencies, including Lighthouse Home Health Care in Old Saybrook, received 4.5 stars; and eight received four stars. Nationally, as in Connecticut, a majority of the agencies fall in the middle, with a three or 3.5 star rating, the data released in late January show. Of the 12,201 home-care agencies rated nationally, only 2,512 received five stars.
Patricia Adams, administrator for home care and hospice at McLean, said, “Our team is really thrilled” with the five-star rating. “It’s taken a lot of hard work and heart, year in and out.” The agency also received above-average patient satisfaction scores.
The five-star rating system, unveiled last summer, is based on nine of 29 quality measures, including starting care in a timely manner, educating patients and caregivers about medications, and patient outcomes such as improved mobility in walking, getting in and out of bed, bathing, and no hospital readmission.
SOURCE: By Jennifer Larue, Hartford Courant
FLORIDA HEALTH CARE TRANSPARENCY BILL PASSES LEGISLATURE, HEADS TO GOVERNOR’S DESK
A bill that would give Florida residents greater transparency on healthcare costs is headed to Gov. Rick Scott.
The Florida Senate passed the bill (HB 1175) by a 34–1 vote Friday, which was the final day of the legislative session. It requires Florida’s Agency for Health Care Administration to contract with a vendor for a website that will show cost and quality of care.
“What we are trying to do is transform how people collect, view and compare information about the price and quality of healthcare,” Sen. Rob Bradley said.
The website would be similar to when consumers select their healthcare plans. They could start by looking up their health problem or procedure, which would list price averages and ranges. That could be broken down into physician services, tests, procedures, and post-surgery therapies or rehabilitation.
The one major thing the bill does not address is price gouging, which had been a big priority of Scott’s. The Scott Commission on Healthcare and Hospital Funding released findings in January that noted price transparency is not the panacea to driving down costs.
SOURCE: Associated Press
IOWA GOVERNOR SAYS CERTIFICATE OF NEED LAW IS BAD FOR BUSINESS
The Certificate of Need (CON) process is something that’s been enforced for more than 40 years in Iowa. It requires companies that want to build new health care facilities to get government approval first. But Iowa Governor Terry Branstad says the CON law prevents competition and makes Iowa less attractive to new business.
Back in February, Iowa’s State Health Facilities Council voted to take no action on issuing a certificate of need to a company wanting to build a psychiatric hospital in Bettendorf.
The vote resulted in mixed feelings and some frustration with the overall process.
“We need to look at [if] we really need to have a certificate of need at all,” says Governor Branstad.
Certificate of need laws started in the 1960s to help keep costs of health care low.
Now Governor Branstad says the law blocks new companies from coming to the state, companies that could bring in new jobs and tax dollars.
“It’s not being used by hospitals to prevent competition. Frankly, I think competition is a good thing especially in the area of mental health,” says Governor Branstad.
SOURCE: By Elizabeth Wadas, WQAD8
Justin Haskins is the director of the Socialism Research Center and editorial director at The Heartland Institute.
