Although he rarely talks about it, the most significant gift Donald Trump bequeathed to economic prosperity was deregulation. And the one sector that was deregulated more than any other was health care.
Since Joe Biden has been re-regulating the economy, its hard to think of a starker contrast between the two leading presidential candidates this yearand it affects all aspects of health care.
I am not alone in thinking that Trump might have won the 2020 election if he had campaigned on his health care accomplishments. Lets see if this years election turns out to be different.
Covid Vaccines. Even before the world had heard the term Covid, deregulation of vaccine production was an early Trump administration success. Because of those early steps, when Covid did arrive, we were much better prepared. University of Chicago economists estimate that that Project WARP Speed produced Covid-19 vaccines at least six months before anybody expected it. That saved an estimated 183,000 lives.
Insurance Tailored to Individual and Family Needs. Imagine combining the average premium with the average deductible for health insurance purchased by a family of four in the Obamacare exchanges. In 2020, that totaled more than $25,000. In other words, a family not getting a subsidy had to spend more than $25,000 before getting any benefit from their health insurance plan! And they had to do that every year!
Not surprisingly, the unsubsidized part of the market was in a free fall. Democrats in Congress responded by creating enhanced subsidieseven for people who are wealthy. The government is now virtually giving health insurance away for free to average-income families.
If you are sick, things are far less rosy, however. The annual out-of-pocket maximum exposure for a family this year is $18,900. Thats the amount you may have to pay in the form of deductibles and coinsuranceover and above any premium payment. Families with ongoing, chronic conditions have to pay as much as that amountevery year!
As an alternative, President Trump used an executive order expanding peoples opportunity to buy short-term insurance. These plans look very much like the insurance that was popular before there was Obamacare. They often sell for as little as half the price of Obamacare insurance; they typically have lower deductibles and broader provider networks; and they offer much better protection for anyone who experiences a costly medical problem.
Congressional Democrats, with the apparent backing of the large insurance companies, have generally been quite hostile to these plans. President Obama limited them to 3 months duration. President Biden recently limited them to three months with a one-month renewal. Under Trump, they were available for one year, with renewals for two more years. A second type of insurance could bridge the gap between three-year periodsallowing a relationship with an insurer indefinitely.
Under the Trump approach, the short-term market could easily evolve into the closest thing we have ever had to free market health insurance, and that includes a free market solution to the problem of pre-existing conditions.
Note that Trump did not abolish Obamacare, or even restrict it (despite a lot of Republican rhetoric). The Trump approach was to expand peoples options. The Biden/Obama approach eliminates options.
Personal and Portable Health Insurance. Before there was Obamacare, some employers gave their employees pre-tax dollars to purchase individually owned insurance. This was insurance the employees could take with them from job to job and in and out of the labor market.
President Obama completely shut down this practice with a threat to fine any employer caught doing it as much as $100 per employee per day. This was countermanded by a Trump rule that has allowed (and even encouraged) employers to fund employee-owned health insurance since January 2020.
It is striking to observe how many significant health policy changes have been affected by presidential action alonewithout any act of Congress. Yet congressional action is needed to take full advantage of the opportunities.
Under the Trump executive order, employees can only use their employers funds to buy Obamacare compliant insurance, which mainly means insurance sold in the exchanges. Moreover, the employees cannot get the subsidies other buyers get in the exchanges. Since the exchange plans are otherwise very unattractive, the take-up rate for this opportunity has been well below initial expectations. What is needed is congressional action to allow the employees to buy any kind of insuranceincluding the short-term plans described above.
Virtual Medicine. When Donald Trump took office,it was illegal in most cases (by act of Congress) for doctors to bill Medicare for consultations by means of phone, email, Skype, Zoom, Facebook, etc. One of the few positive aspects of Covid was the liberation of telemedicine.
Given the Covid crisis, telemedicine would probably have been liberated even if Hillary Clinton had been president. But it would likely have taken another year to accomplish that change. The reason: there are 10,000 tasks Medicare pays doctors to do. Because Medicare insists on setting the price for every one of them, in every institutional setting, and in every locality, figuring out what can and cannot be done by telemedicine and what the right price should be is an enormous challenge.
The reason telehealth emerged so quickly under a Trump presidency is that his administration believed in deregulating telehealth barriers and had been preparing for it long before Covid struck.
Chronic Illness. There is mounting evidence that patients suffering from diabetes, heart disease, and other chronic illnesses can (with training and the right support) manage a lot of their own care as well asor better thantraditional doctor therapy can. If they are going to manage their own care, they can do an even better job if they are also managing the money that pays for that care.
HSAs are a natural vehicle. However, current laws requirement of an across-the-board deductible makes HSAs incompatible with smart insurance design for chronic care. For example, an wise employer might want to make insulin available for free to diabetic employees in order to encourage its use. The same employer might ask noncompliant employees who show up in emergency rooms to pay for that care out of their own account.
Under guidance issued by the Trump administration, employers and insurers can now provide first-dollar coverage for the purchase of maintenance drugs for 13 chronic conditions without running afoul of HSA regulations.
More needs to be done. HSAs ought to be completely divorced from the high-deductible requirement. Let the market, rather than government, make decisions about the optimum role of cost-sharing.
Another important development in the first Trump administration was the move to encourage focused factories in Medicare. In contrast to the rest of the health-care system, Medicare Advantage special needs plans can specialize in 15 chronic conditions. These plans can exclude applicants who dont have the condition. They can also ask health questions and request medical records.
The Obamacare exchanges would be enormously improved if they allowed the same sort of specialization and the same type of risk adjustment that we now find only in the Medicare Advantage program.
Round-the-Clock Primary Care. Concierge doctors used to be available only to the rich. Today direct primary care (DPC) is much more affordable. Atlas MD, in Wichita, Kan., for example, provides all primary care along with 24/7 phone and email access. They offer discounts on lab tests and generic drugs for less than what Medicaid pays. The cost: $50 a month for a middle-aged adult and $10 a month for a child.
An unfulfilled goal of the first Trump administration was to allow employers to put money into individual accounts from which the employees could make monthly payments to DPC doctors of their own choosing.
This should be a high priority in a second Trump term.
A Future Agenda. Space does not permit a discussion of other reforms, including liberating Association Health Plans, requiring hospital price transparency and expanding options under Medicare Advantage.
But I hope I have made clear that Donald Trump does not need a new health policy agenda. He merely needs to complete the agenda of the first Trump administration.
The vision behind the Trump agenda can be found in Reforming Americas Healthcare System Through Choice and Competition. This 124-page Health and Human Services document from 2018 argues that the most serious problems in health care arise because of government failure, not market failure.
Its time to dust off that document and re-read it.