Each year, I host an annual luncheon for our Health Policy Forum members and other interested guests to update them on the latest developments in health policy reform. This year the title of my presentation was: “How Might Obamacare Change in 2017?” Both Donald Trump and Hillary Clinton have posted proposals on their campaign websites for how they would improve the U.S. health care system if elected president. I decided to summarize the proposals, discuss their effectiveness based on data and analyses drawn from multiple sources and see what conclusions may be drawn.
Both a video of my presentation along with a copy of the slides I presented are posted on the Baker Institute’s website. I expressed my main conclusion using the graph below:
The vertical axis represents net federal spending, and the horizontal access indicates access to health care. The point at which the two axes intersect represents where we were at the very start of 2014, the year in which the major insurance provisions of the Affordable Care Act were implemented. Relative to this point, Obamacare has raised net federal spending, but also improved access to health care. The ACA was originally designed to be budget neutral over the course of 10 years. However, delays in the imposition of the Cadillac tax and the medical device tax associated with the legislation have lowered revenues.
Based on analyses I could find, Trump’s proposals would substantially raise costs relative to 2014 and reduce access to health care. A major plank of Trump’s platform would be to repeal Obamacare. Although the insurance provisions of Obamacare put the federal government in a deficit through 2020, the long-term effect of the ACA is to lower the debt. The ACA includes significant reductions in the growth of Medicare payments to health care providers that will produce substantial savings to the government as time progresses. Other Trump proposals to save money, such as allowing the sale of health insurance across state lines, are predicted to yield minimal savings. And a proposal to allow individuals to fully deduct premium payments from their tax returns would add $100 billion to the deficit over time. Repealing the insurance provisions of the ACA would result in 20 million Americans losing coverage. And Trump’s proposals to provide coverage are estimated to add back coverage to only 1.1 million individuals.
Clinton’s proposals would likely raise access to health insurance, but they would impose additional costs on the government. Additional tax credits for individuals to buy insurance through the Health Insurance Marketplace would require more taxpayer dollars. Adding additional protection against high out-of-pocket expenses will increase demand for health care, which will ultimately raise health insurance premiums as beneficiaries use more health care than they would otherwise. Proposals to limit drug price increases will help some Americans, but they will do little to control overall rising health care costs, which are increasing mostly outside of the prescription drug sector. The Clinton website pledges to continue to support some cost-saving provisions of the Affordable Care Act, such as moving toward value-driven health care using accountable care organizations and bundled payments in Medicare. However, these statements are buried at the bottom of a list of several other proposals that will cost more, not less.
Perhaps Clinton is being pulled more to the left than she would like by Bernie Sanders, and she would govern differently if elected president. And both presidential candidates will have plenty of time to modify their platforms as the summer progresses into fall. It’s hard to know how many voters will place health care at the top of their priorities when choosing our new president in November. Regardless of where one stands on the issue of Obamacare, changes will be coming to the law in 2017.
Vivian Ho is the the James A. Baker III Institute Chair in Health Economics and director of the Center for Health and Biosciences.