“Making America Sick Again” by John Edward

John Edward teaches economics at Bentley and UMass Lowell. This is the fourth in a series of columns he has written on economic issues related to the upcoming presidential election. The first column, “The 100 Percent,” appeared on May 16, 2016; the second, “Voodoo Two,” on May 23, 2016; the third. “Paying for the Wall” on June 22, 2016; the fourth, “Trump’s Trade War” on July 5, 2016.

Forget about making America great again. Republican presidential nominee Donald Trump is proposing health-care policies that will make America sick again.

Two observations inform the debate. First, the United States bases its health-care system on market forces more so than any other major economy. Second, we pay more for health care, by a huge margin, than any other country.

Another observation before getting into policy positions: Democratic candidate Hillary Clinton is widely acknowledged an expert on the issue of health-care policy. She has been working on the issue since 1993 when she chaired a task force on health-care reform. At the time The New York Times reported “Hillary Rodham Clinton dazzled five Congressional committees last week, advocating health care legislation in the most impressive testimony on a complex program anyone could remember.”

That effort did not result in national health care. However she played a major role in enacting important legislation. Low-income parents who can get health insurance for their child can thank Hillary Clinton. So to can people serving in the Coast Guard.

With respect to Republican candidate Donald Trump and health care – he knows a lot about gambling.

Clinton wants to “to build on the progress we’ve made” under the Affordable Care Act. She wants to “Fight for health insurance for the lowest-income Americans in every state.” She will “support letting people over 55 years old buy into Medicare.”

In summary, Clinton wants to gradually, some would say cautiously, move forward with Obamacare. She is fully committed to health care for all.

Trump is not cautious. He wants to “Completely repeal Obamacare.” He wants to replace it with reform based on “free market principles.” He is pushing Health Savings Accounts that “would become part of the estate of the individual and could be passed on to heirs.”

In summary, Trump wants to regress to the past and rely on a free-market approach in an industry that has long been a case study in market failures. He is fully committed to health care for insurance companies and the wealthy. His policies will undo the progress that Obamacare achieved. His policies will worsen already extreme levels of inequality.

Trump says, “Obamacare is a disaster.” As evidence he cites increasing health insurance premiums. As observed by Forbes: “If anything, annual premium hikes have slowed down in the years since Obamacare became law.” With respect to Trump’s mastery of the issue, they state: “But when it came to explaining his own health plan, it was Trump who was kind of a mess. Big statements. Vague promises. And not a lot of details.”

Trump also criticized Obamacare because “you can’t get competitive bidding… right now you have no options.” As is true of the vast majority of Trump’s statements, Politifact  – they won a Pulitzer Prize for their fact checking – ruled this statement false. As observed by FactCheck.org  Obamacare extends some of the options and coverage that federal employees, including members of Congress, have enjoyed for decades.

Obamacare is not a disaster. As recently reported in The Boston Globe (8/10/16), twenty million people have health insurance because of the Affordable Care Act. Furthermore, they cite recent studies that indicate people who now have insurance are less likely to be in debt, more likely to get preventative care, and, most importantly, are healthier.

A study by the Robert Wood Johnson Foundation estimates that 24 million people will lose their health insurance by 2021 under “TrumpCare.” The Center for Health and Economy estimated 17 million would lose their insurance immediately. They also found other winners and losers under Trump’s policies. People with high-end “silver” and “gold” insurance would enjoy lower premiums. Low-income families on Medicaid would lose benefits.

Trump wants to cut funding for government-subsidized programs like Medicare and Medicaid. In the context of providing health-care coverage, Trump said: “The best social program has always been a job.” What Trump and many others do not seem to realize is the federal government heavily subsidizes employer-sponsored health insurance. In 2015, employer-sponsored health insurance cost us over $200 billion. By 2022, even without repealing Obamacare, the Treasury Department estimates it will cost $300 billion.

In the U.S. almost 60% of people get coverage through their job. We are the only major economy in the world to rely heavily on employer-sponsored health insurance. Getting insurance through work is unreliable. People switch jobs. People lose their jobs. People working part-time or as contractors usually do not qualify for benefits.

Trump also wants to rely more on health savings accounts. That will work well for high-income earners who can afford to save. The well to do, who have long enjoyed subsidized health coverage, will enjoy another nice tax break. It will provide little help to the millions who will lose coverage under TrumpCare.

The truth is our health-care system was a disaster before Obamacare. We pay a lot more for health care in the United States. Yet, many other countries have systems rated far better than ours.

The truth is that health-care coverage has always been universal. Before Obamacare it was called the emergency room. Waiting for emergencies is one of the factors that makes health care much more expensive.

Both candidates have conflicting opinions on a single-payer system as advocated by Bernie Sanders. Hillary Clinton is currently opposed to it. However, her opposition is partly based on it not being politically viable.

Donald Trump is currently opposed to a single-payer system. However he was in favor of it in the past and still speaks highly of how well it works in other countries.

Analysts and the media have characterized Trump’s health-care policies as inconsistent, conflicting, bewildering, incoherent, and ignorant. Trump may not know much about the health-care industry, but he knows gambling. He wants to “double down” on market-based solutions. He wants to make a big bet on a bad hand.

Clinton’s policies would not fix our health care system. Rather they would provide incremental but much needed improvements. Her plans to provide greater access to Medicare and Medicaid will help. Her plan to increase funding for community and rural health centers will help. Prevention is the best, and lowest cost, policy.

An informed voter is our best citizen.

Next up, which candidate is better positioned to be the next “education President.”

8 Responses to “Making America Sick Again” by John Edward

  1. Joe S says:

    “In the U.S. almost 60% of people get coverage through their job. We are the only major economy in the world to rely heavily on employer-sponsored health insurance.”

    You point out that this method is unreliable for the employee, but I think a larger issue is that it is one more burden (employer social security and Medicare contributions are others) that is placed on US work, to the detriment of competing on price with offshore manufacturing. A drastic change to the tax code is necessary to level the playing field to some degree, and maybe reduce the $500B per year deficit in trade in the process.

  2. David Maine says:

    Mr. Edward a couple of things that you said

    “we pay more for health care, by a huge margin, than any other country.”
    “Clinton wants to “to build on the progress we’ve made” under the Affordable Care Act.”

    Under the Affordable Care act, we pay more than any other country by a huge margin. It that what they
    call an oxymoron or I reading this wrong? I know my health Insurance has gone up every year before and
    after the Affordable Care Act. Please don’t tell me it would have gone up more because that is not true.
    President Obama told us families would save $2000.00 and I have a Family plan with no savings only increases.

  3. Joe from Lowell says:

    Low-income parents who can get health insurance for their child can thank Hillary Clinton. So to can people serving in the Coast Guard.

    I get that the first sentence is a reference to SCHIP, but I don’t get the Coast Guard/health care reform/Hillary Clinton reference. Can someone help me out?

  4. John Edward says:

    As Senator, Hillary Clinton passed bipartisan legislation to make Coast Guard personnel eligible for Tricare — a very good insurance program that serves the military.

  5. John Edward says:

    In response to David Maine. Yes, you are reading it wrong and no it is not an oxymoron. We paid more for health care long before the Affordable Care Act. And I will tell you health insurance would have gone up more because I did tell you. That is exactly what the Forbes article was about.

  6. John Edward says:

    A response to Joe S. on the burden on firms. Paying for health benefits is certainly a burden but not as much of a burden as you might think. If companies did not provide health insurance benefits they would have to pay their workers quite a bit more, and with the health insurance coverage they get a very nice tax write-off (see the $200+ billion government subsidy). Firms providing benefits like this was something that was actually requested by firms as a way to give, initially, their executives more compensation without running afoul of limits on executive pay.

  7. David Maine says:

    In response to John Edwards, you are entitled to your opinion as I am. Did you read the Editorial in the Lowell Sun on Monday?
    “The Unaffordable Affordable Care Act” read it, It is it an oxymoron because it was a lie from the start, that’s my opinion.

  8. John Edward says:

    In response to David Maine, you indeed can share the opinion of a Lowell Sun opinion piece. I will continue to go with what the data says and the data says premiums are increasing at a slower rate under the Affordable Care Act than they were before. Specifically, 34% for the 5 years before the ACA, 26% for the 5 years after.