President Trump's Health Care Actions Are Improving the Lives of Americans

Despite what the critics say, President Donald J. Trump’s healthcare policies will improve peoples’ lives. A new analysis out this week from the Council of Economic Advisers shows large projected net benefits from the Trump Administration’s actions to expand families’ ability to purchase the healthcare that works best for them — to a value of nearly $500 billion over the next decade, which averages about $3,500 per household.

The first critical action was the elimination of the tax associated with Obamacare’s individual mandate, which penalized people who failed to purchase Obamacare-compliant insurance that was often broader and more expensive than they wanted or could afford. The Administration worked with Congress to remove this tax penalty, which imposed a sizable burden on families, especially lower-income households — nearly 80 percent of households paying this penalty had annual income below $50,000. Eliminating this tax also significantly reduces wasteful spending for benefits that people did not want, as demonstrated by their dropping of coverage as soon as possible once they penalty was eliminated. The Congressional Budget Office estimated this action reduces the Federal deficit by more than $300 billion over a decade.

Further, through procedures for notice and public comment, the administration created more affordable health insurance options for employers to cover their workers and also for people without access to insurance on the job. First, in June 2018, the administration made it easier for employers to form Association Health Plans (AHPs), which allow employers to band together to sponsor a group health plan. Longstanding federal law already permitted groups of employers to form national industry associations that could offer health coverage through AHPs. The administration created a new pathway for employers, including certain self-employed individuals, in a geographic locale to band together for more affordable insurance. The Las Vegas Chamber of Commerce is planning to sponsor an AHP through this new pathway, for example. There are now some 500 employers in the process of signing up for the Las Vegas Chamber of Commerce’s AHP, with some of their employees saving more than $2,000 per year.

Second, in August 2018, the administration allowed short-term plans to be offered for up to 36 months, instead of only a few months, reversing restrictions put in place by the Obama administration in late 2016. These plans, which typically cost less than half of Obamacare plans, are a potentially attractive option for the nearly 30 million uninsured, people with gaps in employment, and those most hurt by rising premiums and lack of affordable coverage.

By freeing people to renew their plans for up to 3 years, the Administration’s actions will reduce application costs, lower the risk of loss of coverage, and allow for more innovation in plan design. CEA estimates that the independent effect of these two deregulatory actions will provide net economic benefit to Americans of $25 billion each year, even accounting for the costs of uncompensated care. CBO projects that 6 million people will enroll in this new coverage, including many otherwise uninsured individuals.