When it comes to health care, President-elect Donald Trump has made it clear that he’s all in favor of dessert but doesn’t want any Brussels sprouts.
He was asked during a “60 Minutes” interview that aired Nov. 13 about health insurers not being allowed to deny coverage to people with preexisting medical conditions – by far the most popular aspect of Obamacare.
Would Trump maintain such a measure in whatever he and congressional Republicans come up with as part of their plans to repeal and replace the Affordable Care Act?
“Yes,” he answered. “Because it happens to be one of the strongest assets.”
True. And polls consistently show that everybody likes this part of the health care reform law.
Here’s the thing, though: In the real world, you don’t get dessert unless you finish your veggies.
If Trump and his conservative cohorts want to keep this provision of the law, they’ll also have to accept what is arguably the least-popular aspect of Obamacare – the mandate that most people who don’t receive insurance from an employer purchase coverage on a state-run exchange.
They can fantasize all they want about separating the two elements. But in the cold, hard light of economic viability, there’s no pulling them apart. They are inextricably linked.
This is what’s known as guaranteed issue – the idea that health insurance is available to all, regardless of medical condition.
That has financial consequences. Guaranteed issue means an insurer has to cover more sick people, and sick people are expensive. They submit claims that have to be paid.
To balance that out and keep coverage affordable, insurers need more young and healthy people paying premiums. That’s what Obamacare accomplished with its mandate.
And that’s precisely where reality intrudes on Trump’s wishful thinking.
Even though Trump said in February that he sees the sense of Obamacare’s mandate, it doesn’t seem like the idea remains a part of his policy goals. He’s said far more frequently that he views the health care reform law as a “catastrophe” and a “disaster.”
Moreover, there isn’t a single prominent Republican in Congress who supports the mandate.
That’s a problem.
“If they don’t have a mandate, the whole thing unravels,” said Alain Enthoven, a Stanford University health economist. “You need a way to get young, healthy people into the program.”
How it works
This is how single-payer systems in other developed countries work. Using taxes instead of premiums and co-pays, they include everyone in the risk pool, sick and healthy, young and old. That spreads the insurance risk throughout the entire population and keeps costs down for all.
This is one reason that the average citizen of the European Union pays $3,600 a year for health care. The average American pays $9,400.
Unless Trump plans on nationalizing private insurers – thus creating an American single-payer system – there’s not much he can do to force private insurers to play ball. These are primarily for-profit companies and they’re not in the business of losing money.
No insurer would agree to guaranteed issue without a mechanism in place to expand their coverage of the young and healthy.
Even if the Republican-controlled Congress passed a law forcing them to do so, which would never happen, insurers would simply raise rates to the point where no one could afford policies.
Or the sick could be broken off into a separate “high-risk pool,” which would be similarly self-defeating. Yes, it would keep costs down for the healthy, but anyone with a pre-existing condition would find coverage so expensive as to be unthinkable.
That, in turn, would necessitate government subsidies, and then look – you’re pretty much back where you started with Obamacare, but in a much more inefficient form.
Incredibly, after all the political sweat, heavy lifting and heartache that went into crafting the Affordable Care Act, Trump still talks like health care reform is a relatively simple matter.
The way he describes it, we’ve been fools to pay so much for health care all these years when we could have had even better treatment at a lower cost.
“It’ll be great health care for much less money,” Trump said of his plans in the “60 Minutes” interview. “So it’ll be better health care, much better, for less money. Not a bad combination.”
President Barack Obama was a good deal more level-headed when he told reporters during his Nov. 14 news conference that “this office has a way of waking you up.”
“Those aspects of his positions or predispositions that don’t match up with reality, he will find shaken up pretty quick because reality has a way of asserting itself,” Obama said of Trump.
If the president-elect wants to keep guaranteed issue, he’ll have to wake up to the reality that insurance is the art of managing risk, and you can’t manage health care risk without increasing the number of healthy people in the risk pool.
If Trump truly wanted to create a system of better health care for less money, he’d call for expanding Medicare so it covered everyone – basically bringing us in line with the rest of the developed world.
But that too is a fantasy.