President Trump released his “Great Health Care Plan.” There are eight points in the White House’s fact sheet. Dr. Mehmet Oz, the Chief of Medicare and Medicaid, said it was a “broad framework.” He declined to answer specific questions, referring reporters to a White House official. The official, speaking on “background,” did not provide details. A synopsis of the plan is below:
1. Codifying the Trump Administration’s Most-Favored-Nation deals to get Americans the same low prices for prescription drugs that people in other countries pay.
2. Makes more verified safe pharmaceutical drugs available for over-the-counter purchase. This will lower healthcare costs and increase consumer choice by strengthening price transparency, increasing competition, and — according to the White House — reducing the need for costly and time-consuming doctor’s visits.
3. The plan stops sending big insurance companies billions in extra taxpayer-funded subsidy payments and instead sends that money directly to eligible Americans to help them buy the health insurance of their choice.
4. Funds a cost-sharing reduction program for healthcare plans, which would save taxpayers at least $36 billion and reduce the most common Obamacare plan premiums by over 10%, according to the Congressional Budget Office.
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5. End the kickbacks paid by pharmacy benefit managers (PBMs) to the large brokerage middlemen that deceptively raise the cost of health insurance.
6. Creates the “Plain English” insurance standard by requiring health insurance companies to publish rate and coverage comparisons upfront on their websites in plain English.
7. Require insurance companies to publish the percentage of their revenues paid out in claims versus overhead and profits
8. Provide patients with “clear, accurate, and actionable healthcare pricing information.”
The first point has already proven to be a failure. While President Biden and President Trump were able to lower some drug prices, the majority have continued to rise. On Jan. 9, the pharmaceutical industry, contrary to what President Trump has been saying, raised prices on 850 drugs by a median 4%.
The second point, making more drugs available “over the counter” without a doctor’s prescription, sounds good. But it raises serious questions. A big part of Make America Healthy Again (MAHA) — Trump’s plan for America’s health — is to reduce reliance on drugs and improve Americans’ long-term health by changing what we eat. Making it easier to purchase drugs, without requiring a doctor’s prescription, makes it easier for people to treat symptoms without addressing underlying medical issues.
The third concept, sending money to people to buy insurance without a government “insurance exchange,” eliminates protections against insurance companies refusing to cover pre-existing conditions. It imposes lifetime coverage limits, and allows them to refuse to renew policies when the consumer is ill. All of those practices were common before the Affordable Care Act (ACA) became law. The ACA made them illegal.
In addition, the majority of us get our health insurance through work, Medicare, or Medicaid. Only 10.2% of us buy our own health insurance.
The 4th point, funding “a cost-sharing reduction program,” is unclear. Dr. Oz did not explain what it was or what it meant.
Ending kickbacks to “pharmacy benefit managers” (PBMs) also sounds great. PBMs buy drugs for pharmacies with a system that is almost impossible to understand. There are negotiated prices, “rebates,” and bulk pricing. But if President Trump forces pharmaceutical companies to sell drugs at the lowest possible price, it is unclear why PBMs will be needed or what ending the “kickback” will do.
Requiring “plain English” explanations of health care plans and providing access to health care costs suggest that there are “free market” solutions to America’s health care cost crisis. According to Milton Friedman — the free market advocate, Nobel Prize-winning economist — and Adam Smith — the author of “The Wealth of Nations” — the free market cannot work if it’s a rational decision not to buy. In Friedman’s own words, “a robber saying to you, your money or your life is a choice, but not a free choice”. When you or a loved one is sick and needs treatment to continue living, is it a “free choice”? Is it rational to decide not to pay for the service because you believe it is overpriced? If you have had to call for emergency services, you know how ridiculous it is to suggest that you first go online to check prices or call hospitals to see who is running a special on treating a heart attack, before you call 911. And to suggest that you can tell the ambulance which hospital you want to go to while being treated defies logic.
The final point in the plan, the Trump administration will require insurance companies to publish how much the premiums pay for health care, is already being done through the Affordable Care Act. The ACA limits insurance companies’ overhead to 80% and caps rate hikes without justification to 15%. The White House’s proposal weakens, not strengthens, the limitations on insurance companies increasing profits at the expense of consumers.
Like many things, the points outlined in the Trump health care plan sound good until one examines the proposals. And perhaps, when the details are created and shared, there will be things to support. But for now, the proposals fail to address what ails us: the rising costs of health care and health insurance. No number of platitudes will keep us healthy, and no number of “disclosures” will bring the prices down. If you need lifesaving surgery, will you decline it, because the hospital disclosed that it costs more than it should?
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