Good politics involves consistent, simple messages. Opponents of the Trump administration believe they have found one with health care: sabotage. When new numbers showed a small uptick in the number of uninsured from 2017 to 2018 (which actually resulted from ObamaCare’s own failures), Democratic presidential candidates and House Speaker Nancy Pelosi all had statements including that accusation against the Trump administration.
But they are wrong. After congressional efforts to replace ObamaCare failed, President Trump signed an executive order to expand Americans’ health care options and promote market competition. This order led to bold actions to improve the nation’s health sector and help middle-class families. In particular, the administration expanded access to more affordable coverage, returned regulatory oversight from Washington to the states and increased options for employers to offer health insurance to their workers. Many of these changes essentially reversed Obama administration restrictions that were intended to force everyone into one-size-fits-all plans.
For example, in a rule that was pushed through right before President Barack Obama left office, his administration severely restricted short-term plans. These plans are not subject to ObamaCare’s costly mandates, so they are more affordable for millions of people. Last summer, the Trump administration reversed the Obama administration’s restrictions, allowing millions of Americans the ability to purchase quality insurance that better meets their needs.
The Trump administration also made it easier for small businesses to band together and obtain the same regulatory advantages that large employers receive when they offer insurance. While a dozen Democratic attorneys general are leading a lawsuit to take away this opportunity, the administration is fighting back in the courts.
Because of these two new rules — along with congressional action eliminating the individual-mandate penalty — Americans benefit by nearly $50 billion each year, according to the White House Council of Economic Advisers. Eliminating the mandate penalty was beneficial for several reasons. The burden fell almost entirely on families making less than $50,000 a year. The penalty discouraged the development of innovative coverage options, like short-term plans. The penalty also required many people to purchase heavily subsidized, expensive insurance that many barely valued, which caused a significant waste of taxpayer dollars.
A third regulation may be the most profound. Starting Jan. 1, 2020, a new rule permits employers to offer health reimbursement arrangements (HRA) to pay premiums for plans that employees select in the individual market. Employees do not need to pay federal income or payroll tax on HRA contributions.
Since 80 percent of employers providing coverage offer their workers a single plan, the Trump administration’s HRA rule will give workers greater control and choice. It will also make it easier for workers to keep their plans when they change jobs. In just five years, the administration expects 800,000 employers to offer these HRAs and more than 11 million people to enroll in the individual market with an HRA.
Far from sabotage, the Trump administration’s rule should increase the size of the individual market by 50 percent or more. This would happen without any government coercion or new spending. Counter to the Democrats’ claims, the administration’s three rules are projected to reduce the number of uninsured by millions.
The Trump administration also has changed tax policy to help the chronically ill, making it easier for them to save for future expenses. For example, current IRS rules prevent diabetics from putting money in health savings accounts (HSAs) if they have a plan that covers insulin before the plan deductible is met. Trump’s rule change allows people with these plans to make HSA contributions.
Most underreported is that the Trump administration improved ObamaCare’s market. The current administration reduced the ability of people to game the program and increase others’ costs by waiting until they were sick to purchase coverage. It also approved waivers in seven states in 2017 and 2018 for programs to subsidize the cost of people with high claims.
These states had an average premium decline of nearly 8 percent relative to an increase in other states of three percent. The administration has approved several more state waivers in 2019.
The Trump administration’s health care achievements are broad. Drug prices have come down, largely from accelerating new generic approvals. And, the administration is pursuing free-market reforms outlined in its courageous report, Reforming America’s Health Care System Through Choice and Competition.
While sabotage may make for good politics, it’s an attack without merit. Fortunately, the Trump administration has already delivered a strong record of health care accomplishment. It aims to empower consumers, promote price transparency and disable powerful health care providers from blocking competition.
Brian Blase was a special assistant to President Trump at the National Economic Council focused on health care policy from January 2017 through June 2019. He is now the president of Blase Policy Strategies.