"If the Supreme Court rules that Obamacare is out, we'll have a plan that is far better than Obamacare," President Donald Trump pledged Wednesday. Democrats and their media toadies attacked, claiming Trump will sucker-punch consumers with "junk" plans and abandon people with preexisting conditions -- even cause about 20 million Americans to lose coverage, as New York Times columnist Paul Krugman warns. These claims are lies.
Trump said the plan will be released after the 2020 election, but White House health experts have already put out reports suggesting what the Trump alternative will look like. The key pieces are a special fund for people with preexisting conditions, lower-cost plans and Medicaid reform.
The Trump administration wants to protect people with preexisting conditions by duplicating nationwide what several states have done to fund coverage for the sick separately. That's not abandoning the sick.
A tiny 5% of the population consumes nearly 50% of the healthcare. Forcing consumers to pay the same for insurance regardless of health status, as Obamacare does, is extortion. Actuarial experts explain that's why Obamacare premiums have almost tripled since 2013.
When healthy consumers in Alaska rebelled against skyrocketing premiums, the state set up a separate fund to pay the costs of seriously ill Alaskans out of general revenue, rather than hide the cost inside the premiums that healthy buyers pay. Premiums dropped 22% overall and 39% for bronze plans. Now, other states are experiencing similar success.
Is the money available for a nationwide guarantee? Yes. Coverage for chronically ill people in the individual market will cost about $20 billion a year, less than half the $55 billion spent subsidizing people to overpay for Obamacare. The remaining funds will be sufficient to subsidize premiums in the individual market, which will be substantially lower than now.
A February report from Trump's Council of Economic Advisers proposes this remedy, disproving whopper No. 1, that Trump will forsake people with serious illnesses. Democrats claim Obamacare is the only way to cover preexisting conditions. Wrong. It's just the unfairest way.
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Trump's reform will also slash premiums by liberating consumers from having to buy plans loaded with items Obamacare mandates, such as pediatric dental care -- even if you don't have kids -- or maternity coverage -- even if you're 50. Speaker of the House Nancy Pelosi ardently defends these mandates, warning insurance with fewer benefits is "junk" and insisting consumers need protection. That's whopper No. 2. Look who's actually being protected.
Insurance companies -- they helped write Obamacare. Mandated benefits are their profit protection, not consumer protection. The more a plan costs, the more profits the law allows insurers to make.
The Trump administration is trying to circumvent Obamacare's insurance rules and enable consumers to buy low-cost options such as short-term plans and association plans. But House Democrats just introduced a bill outlawing these options, which the Congressional Budget Office predicts some 6 million buyers will prefer within three years. Who's ripping coverage away from millions? The Dems.
That brings us to whopper No. 3, that Trump's reforms will cause millions to become uninsured. Here are the facts: Of the 20 million newly covered because of Obamacare, three-quarters went on Medicaid, not private health plans. Medicaid was originally meant for low-income women with children and the disabled. The health law added millions of able-bodied childless adults. Trump isn't revoking the Medicaid expansion.
But the administration wants able-bodied recipients to work. A shocking 40% don't work, even part time. The administration already backs state efforts to discourage freeloading, and a Trump replacement plan should make it nationwide. Healthy Medicaid recipients would be required to work, attend school, care for family or volunteer. In short, get off the couch.
Democratic pols say it's "cruel." Really? Why should taxpayers support healthy people who refuse to work, when jobs are plentiful?
Don't believe the dire predictions. Trump's reforms will enable millions priced out of Obamacare to buy insurance, while protecting people with preexisting conditions and getting the scammers out of Medicaid.
Betsy McCaughey is a former lieutenant governor of New York State. Contact her at betsy@betsymccaughey.com.
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