Hello, Nurse! The Healthcare Part of President Trump’s Joint Address. Annotated.

President Trump’s remarks from last night (02/28/2017) are bolded and in quotation marks. Annotations follow. Sources and hyperlinks are at the bottom of the article.

” Tonight, I am also calling on this Congress to repeal and replace Obamacare with reforms that expand choice, increase access, lower costs, and at the same time, provide better Healthcare.”

—President Trump said in an interview with the Washington Post in January that his goal was to have “insurance for everybody,” and his adviser Kellyanne Conway promised that nobody would lose health insurance during his effort to repeal and replace Obamacare. However, an analysis of the current Republican plan to replace the health care law shows that millions who have coverage today would lose it. (NPR)

“Mandating every American to buy government-approved health insurance was never the right solution for America. The way to make health insurance available to everyone is to lower the cost of health insurance, and that is what we will do.”

—What replaces the individual mandate? It is clear that the individual mandate is not popular. So the Republican plans have an alternative: They require Americans to maintain continuous coverage or else face higher costs for preexisting conditions when they do return to the market.Trump didn’t talk about it this way; he just talked about how people with preexisting conditions would have “access” to a plan. He didn’t mention that nearly every Republican proposal would let insurers charge sicker patients a higher rate if they ever had a break in coverage. This “continuous coverage” provision will likely be unpopular for the same reason that the individual mandate is unpopular: It penalizes people for not carrying health insurance. As I reported yesterday, I’ve been working with the research firm PerryUndem to run focus groups with Obamacare enrollees. We found that when we explained this provision, it got a very negative reaction. Obamacare had the individual mandate because it needed a policy to encourage people to buy insurance even when they were healthy, not just when they were sick. Whatever replacement plan Trump comes up with will need a policy like that too, even if the president isn’t keen to talk about it. (Vox)

“Obamacare premiums nationwide have increased by double and triple digits. As an example, Arizona went up 116 percent last year alone. Governor Matt Bevin of Kentucky just said Obamacare is failing in his State — it is unsustainable and collapsing. One third of counties have only one insurer on the exchanges — leaving many Americans with no choice at all. Remember when you were told that you could keep your doctor, and keep your plan? We now know that all of those promises have been broken. Obamacare is collapsing — and we must act decisively to protect all Americans. Action is not a choice — it is a necessity. So I am calling on all Democrats and Republicans in the Congress to work with us to save Americans from this imploding Obamacare disaster.”

—Double-digit increases in premiums are common. President Trump cited Arizona’s 116 percent increase; it is the only state that experienced a triple-digit hike. Premiums for a popular group of health plans sold on HealthCare.gov rose this year by an average of 25 percent, according to the Obama administration. (NYT)

—Several states did not see such dramatic premium changes, and experts say that health care costs broadly are increasing at a lower rate than before the health care law took effect. Most people get their health care through the employer, which hasn’t seen the same premium spikes. And for people on the health care exchanges, federal subsidies are offsetting premium increases for many. (PolitiFact)

—The Republican proposals to replace the ACA would get rid of many of the benefits that companies must offer under the law. That could help reduce premiums for those who would like to buy a more stripped-down insurance policy. However, the Republican plan replaces the Obamacare subsidies to buy insurance and cost-sharing allowances to offset copayments with a tax credit that is likely less generous, so people could pay more for health care even if they have lower premiums. (NPR)

—Premiums for health insurance under the Affordable Care Act increased substantially this year. Deductibles are often high. The number of insurance companies offering coverage has shrunk in many states. Big insurers, losing money in the public marketplaces, have curtailed their participation.But millions of people with modest incomes have obtained coverage, with federal subsidies that reduce their premiums and out-of-pocket costs. Republican efforts to repeal the health care law have created greater uncertainty, which threatens to destabilize the markets even more. (NYT)

—Data released by the Department of Health and Human Services showed that at least 29 states have fewer plan issuers in 2017 than they did in 2016. Nationally, the number of insurers exiting a state outpaced the number of insurers newly entering a state by a factor of more than 5-to-1.There’s also no question that average Obamacare premiums rose significantly when the 2017 rates were announced last fall — 25 percent in 2017, after more modest increases for the previous three years.At the same time, overall premium increases were actually faster under President George W. Bush than under President Barack Obama. Family premiums for employer-sponsored insurance increased by a cumulative 99 percent under the eight years of Bush, while under eight years of Obama, they rose by a more modest 59 percent.Some health policy experts say the biggest risk for causing an actual collapse of Obamacare would be to repeal the Affordable Care Act without also enacting a workable replacement, or repealing it without any replacement at all. (PolitiFact)

Here are the principles that should guide the Congress as we move to create a better healthcare system for all Americans: First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the healthcare exchanges.”

—Obamacare barred health insurers from discriminating against customers with preexisting conditions. Under the health law, sicker patients cannot be denied coverage or charged higher premiums. Trump has repeatedly spoken very positively about keeping this part of Obamacare. He likes the idea that insurers have to offer coverage to everybody. Trump’s word choice here, however, is notable in thinking about how far he’ll go to protect this provision. Trump doesn’t say he wants to ensure that health plans can’t discriminate against Americans with preexisting conditions. Instead, he says he wants to make sure that those people have “access to coverage.” This seems like a nod toward the leading plans on Capitol Hill, which require insurers to offer coverage to everybody — but also let health plans charge higher prices to people with preexisting conditions who have a break in coverage. That is a lot of people: One report from the Commonwealth Fund in the mid-2000s estimated that about 36 percent of Americans have a gap of coverage at least one month long in an average year. (That number has likely declined, however, since Obamacare took effect.) All indications are that Trump does favor more protections for those with preexisting conditions than existed before Obamacare. But his statement here also suggests the protections would be weaker than what exists for patients right now. (Vox)

“Secondly, we should help Americans purchase their own coverage, through the use of tax credits and expanded Health Savings Accounts — but it must be the plan they want, not the plan forced on them by the Government.”

—Tax credits are already a part of the Obamacare system – but such a mechanism is opposed by conservatives. (FT)

—The Affordable Care Act included tax credits to help make coverage more affordable for low- and middle-income Americans. The tax credits are on a sliding scale, giving more financial help to the Americans who earn the least. It’s notable that Trump decided to endorse tax credits in his congressional address. Republicans on Capitol Hill are currently split over whether they should continue any version of this Obamacare program. More centrist congressional leadership, in line with Trump, favors continuing the tax credits (although they would reform the program quite significantly, basing the size of tax credits on age rather than income). More conservative legislators, however, have come out staunchly opposed to any version of a tax credit, describing it as Obamacare Lite. “The tax credits included in Ryan’s plan will create an entirely new entitlement program,” Freedom Caucus Chair Mark Meadows (R-NC) told Breitbart News. “We are concerned about a new federal plan that will only increase premiums and lead to higher prices. We are not going to fix healthcare by replacing Obamacare with another plan that won’t work.” The tax credits are arguably one of the biggest fights currently happening in the Republican Party over what a replacement should look like. (Vox)

— Regarding Health Savings Accounts (HSAs): They are unlikely to reduce overall health care expenditures to any significant extent and any resulting modest reduction in health care spending is likely to result in no small part from individuals—particularly those with lower incomes— forgoing cost-effective medical services including primary care, prescription drugs, and preventive services. (CBPP)

Thirdly, we should give our great State Governors the resources and flexibility they need with Medicaid to make sure no one is left out.”

—This particular point is a bit difficult to decode. The idea of “resources and flexibility” seems to hint at the idea of a block grant, where the federal government would give states a lump sum of money and let them run the entitlement program as they see fit, with less federal oversight. Block grants (including the one proposed in the recently leaked GOP plan) are typically used as a way to cut federal Medicaid spending. The second part of the sentence is interesting here, too, as Trump promises to “make sure no one is left out.” This sure feels like a nod toward the Republican governors (and some senators) who have pushed to maintain the Medicaid expansion. This would include Ohio Gov. John Kasich, whom Trump met with on Saturday and who has been a vociferous advocate for continuing the Medicaid expansion. The governors are still figuring out their exact position on what they want from Trump on Medicaid, and this seems like a space still subject to significant change in coming weeks and months. (Vox)

“Fourthly, we should implement legal reforms that protect patients and doctors from unnecessary costs that drive up the price of insurance — and work to bring down the artificially high price of drugs and bring them down immediately.”

—Trump alarmed the industry when he first said this in January. (FT) See also: Drug Stocks Plunge

—The first part of this point appears to be a reference to medical malpractice reform — which, perhaps somewhat surprisingly, hasn’t been a huge subject of discussion among Republicans as they craft replacement plans. The Congressional Budget Office does not score medical malpractice reforms, such as capping payouts to patients, as producing significant savings or lowering premiums in a meaningful way. The second part of this sentence is pretty interesting, though. It is yet another attack on the high price of American drugs, something that Trump has been unusually focused on for a Republican president. Calling out the “artificially high price of drugs” harks back to his previous comments about how Medicare should start to negotiate for lower drug prices. (Vox)

“Finally, the time has come to give Americans the freedom to purchase health insurance across State lines — creating a truly competitive national marketplace that will bring cost way down and provide far better care.”

—Trump wants to allow health insurers based in one state to sell somewhere else, without having to comply with the other states mandates and regulations. For example: New York tends to have more mandated benefits than Mississippi. Under Trump’s proposal, a health insurer from Mississippi could set up shop in New York and sell its skimpier benefit package at a lower price. In theory, this would give New Yorkers more choice — and those who want cheaper premiums could purchase a plan from this new Mississippi health plan. But there are two big hurdles to this type of policy. One is that insurers just don’t seem that eager to sell across state lines. Setting up a health insurance plan means building a network with doctors and hospitals. And it turns out that can be awfully hard to do when you’re an insurer based half way across the country. Georgetown University’s Sabrina Corlette recently looked at what happened when six states opened their borders for cross-state sales. Not one of them had a new insurer come in from out of state. Across state lines laws did not result in a single insurer entering the market or the sale of a single new insurance product. Further, there was no evidence that these initiatives actually bring down costs or increase consumer options. In fact, such proposals could put consumers at risk by limiting state officials’ ability to respond to the needs of their residents and eliminating important state-based protections. Second, a lot of state level officials really don’t like this idea, which they think tramples on their right to regulate their own insurance market. Why should a Mississippi insurer, the argument goes, get to come in and sell plans that don’t include the benefits that New York has determined to be important? (Vox)

“Everything that is broken in our country can be fixed. Every problem can be solved. And every hurting family can find healing, and hope. Our citizens deserve this and so much more.”

— Behind these ideas is the belief that folks at the lower end of the economic ladder just don’t deserve health care – that it’s somehow their fault that their employer doesn’t offer insurance or that they can’t afford to buy expensive health plans, (Former Kentucky Governor Steve Beshear, NPR)


CBPP: Center for Budget and Policy Priorities, Health Savings Accounts Unlikely…

FT: Financial Times, Trump’s First Speech to Congress, Annotated

NPR: Democratic Response to Trump’s Speech, Annotated

NYT: New York Times, Fact Check: Trump’s First Address to Congress

PolitiFact: Fact-checking Donald Trump’s Address to Congress

Vox: Sarah Kliff, Trump Proposed Five Different Policies…



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