Republican presidential front-runner Donald Trump is putting forward a more detailed health care reform plan, that one leading policy expert says has many strong free market features but needs amending in two critical areas.
Trump has long mentioned his desire for a full repeal of Obamacare and remove barriers so patients can shop for health plans across state lines. Those are the first two parts of Trump’s new seven-point plan. It also includes allowing individuals to fully deduct their health care premiums from their annual tax returns and championing Health Savings Accounts that would be tax-free for the individual and estate tax-free for their heirs.
The Trump plan would also call for price transparency from doctors and hospitals, block grant Medicaid to the states and “remove barriers to entry” for drug companies who can offer quality medications at lower prices.
Galen Institute President Grace-Marie Turner, an ardent opponent of Obamacare and the Clinton administration’s attempts to increase the government’s role in health care, is largely impressed.
“Many pillars of his plan are very familiar to free market advocates. The giving people help in purchasing their premiums through tax breaks is important. Price transparency, block granting Medicaid to the states so the states can have more control over Medicaid dollars without jumping through so many of Washington’s hoops and following so much of its red tape,” said Turner.
The additional detail came hours before Thursday’s GOP debate in Detroit and nearly a week after Sen. Marco Rubio pressed Trump to offer specific details on his plan besides a full repeal of Obamacare.
“It was obviously precipitated by the debate, when he really got backed into a corner when he didn’t have other ideas. Most of these ideas are pretty solid ideas but they need to be developed some more,” said Turner.
But while Turner applauds tax breaks to help defray the cost of health insurance, Turner says Trump is going about it the wrong way.
“The problem with a deduction, which is what he is advocating, is that it’s worth very little to people at the bottom end of the income scale. If you are in the 10 percent tax bracket, and you basically get a 10 percent cut in your premium, that’s very regressive,” said Turner.
“Somebody who’s in the 40-50 percent tax bracket, counting federal income taxes and state and payroll taxes, they may get a tax cut of 50 percent of the cost of their premium,” she added. “A tax credit really can help those at the lower end of the income scale, who most need help in purchasing health insurance.”
The other area that concerns her is the removal of barriers in the pharmaceutical industry.
“Basically, he’s calling for price controls on prescription drugs. he’s been very much of a populist. ‘Drug prices are too high. If we let people import drugs from abroad or let the government negotiate prices for prescription drugs, we could save $300 billion a year. That’s absolutely not true. What he’s advocating with those two policies is importing price controls on prescription drugs,” said Turner.
Not only does Turner believe Trump’s math is off, she says it would stifle development of new drugs.
“There is a reason that the United States is the leader in the development and introduction of new drugs into the market. We don’t have price controls. If we do and dry up the research budget, like so many European and other developed countries have done, then we will not have the new drugs of tomorrow,” said Turner.
Trump defenders say their candidate is referring to negotiating prices and not mandating them. Turner says that’s not how it works.
“Government doesn’t negotiate. It dictates prices,” she said.
Overall, however, Turner is pleased with the plan. But she hopes this represents a serious shift toward a free market approach to health care from a candidate who has had good things to say about single payer health care in Canada and Scotland as recently as the first GOP debate.
“What worries me is that in the past, he really has been all over the map, from supporting an individual mandate to now saying he does not support the individual mandate, and everything from talking about single payer to talking about free markets and Health Savings Accounts. The question is does he really have ownership of this health care plan or is this something his campaign put out,” said Turner.
“What really matters is whether there’s going to be some consistency in allowing this to become the basis for what could be a credible health reform plan,” said Turner.
