Trump vs. Biden On Health Care: A Stark Choice For Voters

The future of the U.S. health care system will depend a great deal on whether President Donald Trump wins reelection or former Vice President Joe Biden defeats him, and the contrasts between Trump’s record and Biden’s aspirations make the stakes plain. Although Biden, a Democrat, isn’t campaigning in favor of anything as dramatic as “Medicare for All,” it’s hard to overstate the differences between his vision for American health care and Trump’s. Like his fellow Republicans, Trump wants to repeal the Affordable Care Act and for the government to do less about the cost and the availability of decent coverage. Biden wants to preserve and build upon the 2010 law also known as “Obamacare” and enlarge the government’s role in making health care more accessible and affordable. Either man’s agenda would depend on outside political forces. Trump is counting on the Supreme Court to eliminate the law, and has faced legal challenges to many of his health policies. Many of Biden’s key proposals, such as the creation of a government-run public option as an alternative to private health insurance, would run into staunch opposition from industry groups. And both face the prospects of a split Congress, with Democrats controlling the House and Republicans controlling the Senate, or a majority in the Senate not large enough to overcome the filibuster. Biden’s Plan: Making The Affordable Care Act More Affordable In 2010, when President Barack Obama signed the Affordable Care Act, Biden famously called it a “big fucking deal.” Although Biden’s campaign proposal doesn’t live up to that standard, it’s closer than most people probably realize. Biden’s plan consists of several interlocking provisions designed to fortify and expand the Affordable Care Act, mainly by spending more government money to help people get insurance and creating a new, government-run insurance plan open to anybody. Biden would also let the federal government negotiate directly with the pharmaceutical industry over the price of drugs, and he’d lower the Medicare eligibility age to 60. The complexity makes it tough to explain and it doesn’t envision the sort of wholesale transformation that would come with Medicare for All, the proposal to replace existing insurance arrangements with a single government-run plan. Under Biden’s plan, some Americans still wouldn’t have insurance and some of those with coverage would still struggle with high out-of-pocket costs. But, as a whole, Biden’s proposal would represent one of the largest expansions of health coverage in American history. One reason is a provision that has gotten very little attention because it’s somewhat technical: A set of policy changes designed to improve the affordability of insurance available through HealthCare.gov and state-run “exchanges” like the Maryland Health Connection and Your Health Idaho. Right now, people who buy coverage through the exchanges can choose from a range of policies, from cheap “Bronze” policies that cover relatively little to expensive “Platinum” policies that cover nearly everything. The Affordable Care Act also discounts premiums, through a system of tax credits, with a goal of making sure anybody can get a “Silver” plan for no more than about 10% of their income. But the tax credits cut off once household income hits four times the poverty line ― which, for a family of four, works out to about $105,000 a year. And Silver plans aren’t that generous: They cover roughly 70% of the typical person’s medical costs, which means they can have deductibles of several thousand dollars. Insurance under these circumstances can be very expensive or flat-out unaffordable for some people at higher-middle incomes, especially those in their 50s or early 60s who are charged higher rates. The Biden plan would redefine “affordable” as 8.5% of income, rather than nearly 10%; extend that guarantee to everybody, not just people with incomes below four times the poverty line; and peg the subsidies to gold plans, which offer coverage pretty similar to what typical employer plans do. That is a lot of moving parts, but it could add up to some very big savings, as a report from the Henry J. Kaiser Family Foundation recently showed. Today, for example, a 60-year-old living alone and making $50,000 would not qualify for subsidies; nationally, the average monthly premium for a Gold plan with a $1,500 annual deductible is $1,029. Under the Biden plan, monthly premiums for that same Gold plan would be just $354. That’s 66% lower ― or, to put in more concrete terms, the difference between paying more than $12,000 a year for insurance and just a little more than $4,000. Biden would also open subsidized plans to all Americans. That’d be a big change from the Affordable Care Act, which opens subsidized plans only to people who can’t get an affordable employer plan. The ACA defines “affordable” as premiums below roughly 10% of income. But many retail workers, security guards and other low-wage workers can’t afford to put 10% of their income toward health insurance. Worse still, the method of calculation can make it especially difficult to get spousal or dependent coverage. This is called the “family glitch,” and it effectively means there’s no cap on what some families could spend on health care. With the Biden plan, 12.3 million Americans with employer coverage ― including those who fall into the family glitch ― could save money with subsidized coverage, according to the Kaiser Family Foundation projection. The Return Of The Public Option People buying coverage in the exchanges would also have a new way to get insurance: through a new government-run insurance plan. This is basically the “public option” that liberals had desperately wanted the ACA to include, partly because they believed it would use the government’s pricing power to pay less to the providers of medical care than private insurance does. It’s not clear whether the public option Biden envisions would actually offer that better deal, because he hasn’t provided enough details on how it would work. But, at the very least, it could be the foundation for a bigger plan in the future, one that really did use government pricing power to get better deals from doctors and hospitals. It could then pass along lower premiums to enrollees. The public option would serve another vital function: as a fallback for Medicaid. The ACA expanded the federal-state program for low-income Americans, opening it to anyone whose income is below or just above the poverty line. Millions have gotten care that way and, as a large body of research has shown, the result has been better access to care, reduced financial hardship and better health outcomes. But Republican officials in a dozen states still haven’t expanded Medicaid eligibility, even though the federal government picks up nearly all of the cost. An estimated 4.7 million adults who would be eligible remain uninsured. Biden’s plan would enroll these people into the new public option automatically. That’d make a huge difference, especially in big states like Florida, Georgia and Texas that have not embraced the expansion. Tradeoffs And Costs Health policy is all about tradeoffs, and the Biden plan has its share. With the Biden plan in place, it’s likely that the number of people with employer-based insurance would fall and the number of people with subsidized coverage (including the public option) would rise. But it’s important to be clear about who these people are ― and why they’d be moving. For the most part, experts say, it’d be low-wage workers who will be moving voluntarily, because subsidized insurance would be much cheaper. And while it’s possible employers could drop coverage on their own, few experts expect that to happen anytime soon. Among other things, businesses still see health benefits as a useful way to lure and retain workers, especially the higher-paid workers who wouldn’t get much of a subsidy and thus wouldn’t save money by switching into the exchanges. The other, clearer tradeoff is the price tag to the federal government. The 10-year cost of Biden’s plan would be $850 billion, according to an estimate from the Committee for a Responsible Federal Budget. That is a lot of money and it will have to come from somewhere. But any money the government would be spending on health care would largely displace money that individual Americans are already spending. Overall, national health care spending would probably come down slightly, according to the Committee’s estimate, thanks in part to lower spending on drugs once the federal government starts negotiating directly with drugmakers over what they charge. And the new government spending would buy something important: An expansion of insurance to around 95% of the population, with more generous insurance overall for those who have coverage.

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