Is Donald Trump Living Up to His Campaign Promise on Health Care?

A Look at Plans to Change Medicaid and Medicare

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President Donald Trump made promises to Americans on the campaign trail. Repealing Obamacare and preserving Medicare were on the top of that list. Is our President living up to those campaign promises?

A Look at Trump's Campaign Promises

As a reminder, President Trump campaigned on a seven-part health plan. With the following changes, he vowed to make health care great again.

  1. Repeal the Affordable Care Act, aka Obamacare
  2. Allow selling of health plans across state lines as long as health plans follow state guidelines
  3. Allow individuals to deduct health insurance premiums on their tax returns
  4. Allow individuals to use Health Savings Accounts (HSA)
  5. Require price transparency across the healthcare system
  6. Discontinue federal grants to states for Medicaid
  7. Allow expansion into free markets, including purchasing cheaper drugs overseas, to decrease the cost of prescription medications

Is President Trump delivering on his campaign promises?

Trump Takes on Medicaid

No matter how you look at it, Medicaid funding is on the chopping block. This could affect how many people are able to access health care through the program.

Repealing Obamacare

When the Affordable Care Act was introduced in 2010, there were as many as 48 million uninsured Americans, approximately 15.7 percent of the population. According to the Centers for Medicare and Medicaid Services, the passage of the law decreased that number to 9.2 percent by 2015.

Obamacare allowed young people to stay on their parents' plans longer, prevented insurance companies from increasing premiums based on pre-existing conditions, allowed for expansion to existing Medicaid programs and developed the Health Insurance Marketplace as a more affordable option to those who did not meet criteria for Medicaid. Simply put, the cost of private insurance plans at the time was simply too high for many people to manage.

Many argue that Obamacare continued to leave health plans out of financial reach. The deductibles for many plans have become so high that many people cannot afford them. Is that better than having no health care at all?

By passing the American Health Care Act (AHCA), President Trump aims to reverse many of the policies put forth by Obamacare. In doing so, the Congressional Budget Office estimates that 14 million people will lose access to health insurance next year and 23 million people in 10 years. To be more specific, if we follow the current trajectory under Obamacare, 28 million people under 65 years old would be uninsured in 2026 but with the AHCA, that number would jump to 51 million.

Cutting Federal Funding to Medicaid

Obamacare offered incentives to states that chose to proceed with Medicaid expansion. Those states received federal dollars to assist them, up to 100 percent of expansion costs for three years and then 90 percent of costs through 2020. Medicaid expansion would come to a halt under the AHCA, although the Trump administration would continue the promised funding through 2020.

Beyond repealing Obamacare, the AHCA aims to cut other federal funding to Medicaid programs as well. It has proposed limiting funding to block grants. Since 1965, states have received federal dollars for Medicaid based on the number of people that were eligible for the program. Block grants would change all that, offering a fixed amount of money for Medicaid regardless of a state's need. Funding changes would affect all states, not only those that participated in Medicaid expansion.

Decreased federal support for Medicaid places a heavy burden on the states to make ends meet. Many states are struggling with budget deficits as it is. In 2016, more than half of the states earned less revenue than their proposed budgets and 19 of them had to make budget cuts mid-year to stay afloat.

The Congressional Budget Office estimates that the AHCA will cut Medicaid funding by $800 billion over the next decade. By putting more burden on the states to provide funding, who and what Medicaid covers are likely to change. Some states may opt to set up enrollment caps or establish waiting lists for Medicaid benefits for people who meet eligibility requirements. Some states may be forced to cut benefits to keep costs in check. Some may do both.

Trump Takes on Medicare

On the campaign trail, President Trump promised not to cut Medicare benefits, but the AHCA would have certainly an impact on Medicare beneficiaries. He also made several promises for American seniors that he has yet to take action on.

Negotiating Drug Costs

The same medications used in the United States often cost less in foreign countries. For example, Advair, a common medication used to treat asthma, costs $309.60 per month in the United States whereas it only costs $74.12 in Canada and $46.99 in the United Kingdom. At the current time, Medicare does not allow enrollees to purchase their medications out of the country to take advantage of cheaper drugs. President Trump wants to change that. The pharmaceutical industry, however, has been set against it.

President Trump also wants to negotiate with American pharmaceutical companies for better rates. Medicare Part D prescription drug plans are currently run by private insurance companies, and laws are in place that prevent the federal government from intervening in pricing. Again, there is significant lobbying by pharmaceutical companies to continue this legislation.

With only ten percent of health spending reported on medications, the Congressional Budget Office (CBO) states they would not expect significant cost reductions with federal intervention. Other policy briefings suggest that Medicare could save as much as $16 billion every year by negotiating and decreasing the cost of brand name drugs to levels the federal government has already negotiated for Medicaid and the Veterans Administration.

To date, no legislative action has been taken to address drug pricing.

Tax Savings

President Trump may offer Americans opportunities to save on their taxes. At the present time, Medicare beneficiaries are not allowed to take advantage of health savings accounts. With a change in legislation, Medicare beneficiaries could set aside money tax-free for the purposes of paying for healthcare expenses.

By also making the cost of premiums tax deductible (an amount ranging from $1,608 to $5,143 for Medicare Part B in 2017)seniors could save more of their retirement earnings.

Again, no efforts have been taken to put this into formal legislation.

Repealing Obamacare Affects Medicare

Though attention has been focused on Medicaid and the uninsured, a full out repeal of the Affordable Care Act could have significant repercussions for people on Medicare as well. Obamacare helped to establish programs to improve hospital care, to decrease Medicare fraud, and to innovate new payment models that could save money for the program. It also expanded on Medicare coverage, making preventive services like colonoscopies and mammograms free when you receive care from a participating provider. Most importantly, it helped to decrease the cost of prescription drugs for people on Part D plans.

At first, it was unclear how the AHCA would address these issues, but it seems that not all Obamacare efforts are on the chopping block. The AHCA would not change current benefit coverage, and it will allow the donut hole to close by 2020 as planned.

What it changes are taxes. The AHCA would repeal the Medicare payroll surtax on high-income earners, meaning that less money will be available for the Medicare Trust Fund over time. In fact, it is estimated that the Medicare Trust Fund will lose solvency by 2025, three years earlier than predicted in 2016, if the AHCA comes to pass.

The Reality of a Trump Administration

President Trump went to task and signed an executive order on January 20, 2017, the day of his inauguration. The order directed federal agencies to scale back on Obamacare "to the maximum extent permitted by law". The order did not, however, repeal the Affordable Care Act nor did it outline how agencies were to proceed on the issue.

Though he stated he would not touch the Medicare program, President Trump named Representative Tom Price as Secretary of Health and Human Services who was confirmed on February 10 after contentious Senate hearings. Price has been more than vocal about wanting a major overhaul of Medicare. He has endorsed partial privatization of Medicare with the "Better Way" plan put forth by the GOP in 2016. In addition to that, he has advocated for major cuts to the Medicaid program.

The President has also tapped Seema Verma to run the Centers for Medicare and Medicaid Services (CMS). A healthcare consultant and founder of SVC. Inc., her work in Indiana led to the requirement that people on Medicaid pay monthly fees or otherwise lose their coverage for six months. In other states, she has worked on proposals that require people on Medicaid to pay for part of their care or that require them to work or actively look for work. To date, she has contributed on a state level, but in a federal role, she could change standards nationwide. 

A lot of promises have been made and many lives will no doubt be affected. President Trump has sent mixed signals to the American people. What he has promised on the campaign trail has not always been in alignment with his actions as President. An Obamacare repeal is likely to happen, at least partially, if the AHCA comes to pass. Medicaid cuts are sure to follow. What will happen to Medicare, however, is a guessing game.

A Word from Verywell

The proposed AHCA passed the U.S. House of Representatives, but until it is approved by the Senate, the Affordable Care Act remains the law of the land. President Trump promised to repeal Obamacare, but the AHCA as written will negate only parts of the law. He promised to keep Medicare untouched, but the AHCA will cut funding to Medicare. It is still early in the presidential administration, and only time will tell if the President will live up to the promises he made to the people who voted for him on the campaign trail.

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