September 24, 2016


Estimating the Impacts of the Trump and Clinton Health Plans (Q&A with Christine Eibner, Rand)

Christine Eibner, a senior economist at the RAND Corporation, led a team that analyzed parts of the proposed health care plans of the two major parties' presidential candidates, Hillary Clinton and Donald Trump. [...]

Can you briefly describe what each candidate's plan does and how you went about analyzing the plans?

The Trump plan repeals the Affordable Care Act (ACA). So we first analyzed the effect of full repeal by itself. Then we conducted three additional analyses, in which we examined the effect of repealing the ACA combined with each of three other parts of the Trump proposal:

allowing tax deductions for the full amount of health insurance premiums;

converting Medicaid to a block grant program; and

allowing insurers to sell policies across state lines.

The Clinton plan modifies the ACA. It introduces a number of policies designed to expand coverage and reduce consumer out-of-pocket costs. We analyzed four of the policies included in Clinton's plan:

A cost-sharing tax credit of up to $2,500 per individual or $5,000 per family to offset the cost of out-of-pocket spending in excess of 5 percent of income, available to all individuals enrolled in private coverage;

Reducing the maximum premium contribution individuals must make to enroll in a benchmark plan on the ACA marketplaces;

Fixing the "family glitch," a quirk in the ACA that means workers and their families could be ineligible for marketplace tax credits, even if they cannot obtain employer coverage without spending more than 9.7 percent of income on health insurance. We model this policy in combination with the reduction in premium contributions.

Introducing a public option in the ACA's marketplaces. [...]

What were the key findings?

All of the Trump proposals decrease the number of insured, increase out-of-pocket spending for consumers enrolled in individual market plans, and raise the federal deficit compared to the ACA. The federal deficit increases because repeal of the ACA would eliminate the ACA's provisions that reduce spending and generate revenue, such as changes to Medicare payment policy; and taxes and fees levied on insurers, medical devices, and branded prescription drugs. The amount that the deficit increases varies widely, from half a billion dollars under the block-grant provision to $41 billion under the tax deduction provision. People with lower incomes would be more affected than other groups. This is true largely because repealing the ACA means eliminating Medicaid expansion, which covers people with incomes below 138 percent of the federal poverty level. Sicker people would also be disproportionately affected, because the proposals would eliminate the ACA's rule that people with pre-existing conditions can't be denied coverage.

The Clinton proposals all increase the number of people with insurance and decrease consumer out-of-pocket spending among the insured population. Three of the four proposals increase the federal deficit. The amount of the increase varies from $3.5 billion under the premium reduction to $90.4 billion under the cost-sharing tax credit. One of the Clinton proposals (the public option) reduces the deficit by $700 million. In terms of out-of-pocket spending, the Clinton proposals have the biggest effect on people whose incomes fall between 139 to 250 percent of the federal poverty level ($33,534 to $60,750 for a family of four). The cost-sharing tax credit proposal has the largest effect because it potentially touches as many as 178 million people and expands coverage to an additional 9.6 million.

Posted by at September 24, 2016 5:56 PM