Word Salads, Health Care Coverage and Sunday’s Presidential Debate:

Word Salads, Health Care Coverage and Sunday’s Presidential Debate:

Where Do We Go from Here


Thank heavens that someone finally asked the Presidential candidates about health care policy and the Affordable Care Act (ACA). Republican candidate Donald Trump replied with what sounded like a “word salad” riff on selling insurance without lines/ across state lines and enacting block grants and repealing Obamacare. Presidential candidate Hillary Clinton replied with a defense of the positive accomplishments of the ACA and CHIP, an acknowledgement of growing pain problems and a vow to improve affordability for individuals and small employers and to challenge the unwarranted (in her view) increases in premiums from some health plans and drug manufacturers; she then mentioned the public option as one way to improve affordability.

Trump then accused Clinton of supporting Canadian style single payer, which he said Canadians did not like at all and they all come to the US for their health care. She said that in fact the Canadians like their system a great deal, do not come flocking to the US for health care, but single payer is not what she supports for this country.

What the heck were they saying/talking about? “Word salad is a "confused or unintelligible mixture of seemingly random words and phrases" … The words may or may not be grammatically correct, but are semantically confused to the point that the listener cannot extract any meaning from them.”

First, we need to acknowledge that Trump’s strength is a mastery of building luxury hotels and buying golf courses and buying beauty pageants; health policy is not his forte. This is Clinton’s strong suit; she led the effort to pass CHIP (Child Health Insurance Program) for uninsured children; before that she developed the Clinton health plan for her husband’s Administration. She had memorable debates with then Presidential candidate Barack Obama during the ’08 campaign about the individual mandate; she supported and he opposed; it eventually became one of the touchstones of ObamaCare. She had memorable debates during the ’16 primaries with Senator Bernie Sanders about single payer Canadian style coverage; he supported and she opposed as too costly.

He wants to repeal The Affordable Care Act and she wants to retain it. The ACA has covered over 20 million of the uninsured by expanding Medicaid and creating refundable tax credits to help the individually insured pay their premiums and out of pocket spending. It has protected those with pre-existing conditions by barring pre-existing condition exclusions. It is steadily closing the “donut hole” for seniors’ prescription drug coverage. Under the ACA US health costs have grown at their slowest rates in many decades. Despite all the huffing and puffing, there is no going back, you cannot disenfranchise 20 million Americans.

He wants to repeal the fifty-year old Medicaid program for the poor and block grant Medicaid (for the poor) and CHIP (for poor and moderate income children) funds to the states; she is opposed. Block grants are a term of art for sending federal funds to the states with no strings attached. This would impact well over 70 million seniors, disabled, children and working poor by eliminating their federal entitlement to coverage. Each state could then do with the funds as it sees fit with no federal input or supervision. This is a complete non-starter, it would end eligibility for 1/3rd of all Californians.

His riff on “lines” means he wants to increase competition by allowing insurers with a license in a single state to sell its insurance policies in all 5o states without meeting the insurance rules and regulations in the other 49 states where it is unlicensed or being subject to their states insurance departments. This means that the insurance rules and regulatory practices of the state with the least regulation (maybe Texas) would trump the insurance rules in the other 49 states. This apparently would apply to commercial insurance, Medicaid managed care plans and Medicare managed care plans (Medicare Advantage). This is an extreme form of deregulation that would be resisted by the Insurance Departments and plans in the other 49 states.

She wants to increase competition in the federal and state Exchanges/Marketplaces by allowing the public option – i.e. Medicare coverage – as a competing plan. The proponents of this option suggest that Medicare has lower administrative costs, a broad network of providers and lower prices than commercial insurance. It is not clear whether “the public option” means the traditional Medicare fee for service programs or whether it refers to and includes the Medicare Advantage plans. In California, we already have a few public plans (such as LA Care) participating in the Exchanges; there is no particular harm to the market, nor any huge variation in prices and consumer participation as compared to other private Medicaid managed care plans that also compete in these markets.

It's at this point that he accused her of favoring a single payer Canadian system, which is like Medicare. In fact during the primaries, Senator Sanders favored a single payer while Secretary Clinton wanted to build on and improve Obamacare, which was modeled on RomneyCare. Medicare is in fact enormously popular among seniors, witness the signs "keep your government hands off my Medicare at the Tea Party rallies. Secretary Clinton has proposed opening up Medicare to those over the age of 55 who want to buy into the program.

She wants to increase the refundable tax credits for individual coverage through the state and federal Exchanges to help more people afford the coverage that is offered. She also wants to offer a tax credit for individuals whose share of premiums and out of pocket health costs exceeds 5% of their income. See my recent blog on the Clinton proposed health reforms. He wants to repeal the refundable tax credits and replace them with tax deductions (this was not discussed). Deductibility primarily helps individuals in higher income brackets who itemize their income tax deductions. It already exists in the tax code for the self-employed buying individual policies.

She wanted to continue the ban on preexisting condition exclusions for those with serious illnesses. He wanted to eliminate the ban and replace it with nationwide competition based upon single state insurance regulations. His advisors may have not explained that this vastly increases the incentives and capacity of insurers to exclude sick people and those with genetic conditions and those needing coverage for maternity benefits.

They did not discuss their respective ideas for dealing with price gouging by certain drug manufacturers.

Mr. Trump referred to 70% increases in health insurance premiums in the Exchanges. This has happened for a few plans in a few states. It should be noted that in California, after two years of 4% increases in health insurance premiums, Covered California premiums increased by 13.2% in 2017. Prices for the lowest cost bronze plans however increased only 3.9% (for a three-year average of 3.9%). Prices for the lowest cost silver plans increased 8.1% (for a three year average of 4.8%). Prices for the 2nd lowest cost silver plans (reference plans) increased 8.1% (for a three year average of 4.1%). Prices for the savvy comparison shoppers (i.e. those switching to the lowest priced plan in the metal tier they selected) declined -1.2%. http://www.coveredca.com/news/pdfs/CoveredCA-2017-rate- booklet.pdf  There are “big league” differences among the premium increases in different plans for the coming year, with Kaiser premiums growing by 5.5 to 6% depending on the region while Anthem and Blue Shield premiums increased by 15-25% depending on the region.


Prepared by Lucien Wulsin

Dated: 10/12/16




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