Trump proposes replacing ACA with snake oil

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This is one of Trump's defining moments in his 60 Minutes interview aired last night.

Not only does he "know how to take care of Congress" and "deal with China," but he's also got the solution to health care.

How's he doing, boys and girls? The dipshit has no hair!

http://www.forbes.com/sites/matthewh...-s-healthcare/

On '60 Minutes,' Donald Trump Accidentally Proposes Radical Reform Of U.S. Healthcare


Matthew Herper
Forbes Staff


In an interview with 60 Minutes, America’s most-watched television news magazine, Donald Trump, America’s most-watched presidential candidate, basically just promised that he can defy gravity.

I’m not talking about his vow that he could reduce taxes on the middle class — for some people, rates would go down to zero! — and corporations and pay for it by going after Wall Street fat cats and growing the economy. I’ll leave the plausibility of that to others. I’m talking about Trump’s faster treatment of the way he would repeal and replace President Barack Obama’s signature achievement, the Affordable Care Act, or Obamacare.

Trump’s assurance, repeated again: he will make sure that every person in the country has health insurance, and will do so in a way that lowers rates for most Americans. And, he claims, he would do this in a way that actually lowers costs over the long term. In order to help the poorest 25% of the population, Trump said, he’d “make a deal with existing hospitals to take care of people.”

Sounds great. Except that’s what Medicaid, the program that already exists to take care of the poor, already does. It drives a hard bargain, and, as a result, 56% of psychiatrists and 40% of orthopedic surgeons don’t accept Medicaid patients. How does Trump expect to drive a harder bargain?

And as for the rest of the market, as my colleague Bruce Japsen writes, Trump is describing something very much like Obamacare, which he says is “a disaster.” Trump’s words: “[I]t’s going to be a private plan and people are going to be able to go out and negotiate great plans with lots of different competition with lots of competitors with great companies and they can have their doctors, they can have plans, they can have everything.”

This is already what’s supposed to be happening with Obamacare. But Trump’s version sounds, well, bigger. The Obamacare exchanges, remember, apply to a small sliver of the insurance market: those people who do not get insurance from their employers and do not qualify for Medicaid or Medicare. Trump seems to be describing a much bigger system where people purchase their own private plans.

We know that he’s a big believer in competition. In a far more detailed description of Trump’s health plan that his campaign gave to Forbes contributor Dan Diamond, Trump placed a great deal of confidence in the idea that getting rid of state barriers to insurance would result in more competition. Actually, as Diamond explained, it might allow insurance companies to evade regulation, because insurers are regulated at the state level.

As Obama did (remember “you can keep your plan”?), Trump ignores the fact that the only way insurers can control costs is to choose which doctors you can go to, which medicines you can take, and where you can get your surgery. That’s what forces hospitals and doctors and drug companies to agree to lower prices: the knowledge that they’ll lose business if they don’t make a deal.

The other implicit solution from the Donald is a more radical one: centralized control. This seems like the instinctive reaction of a capitalistic empire-builder. Trump simply assumes that he’d have control, and leverage, to negotiate for lower cost care with existing hospitals. He assumes that he’d have centralized control, like a chief executive or, more than that, a business owner.

Obamacare doesn’t have this kind of centralized control, and neither do Medicare and Medicaid. The United States has always had a deep-seated fear of creating a socialized medical system. So Medicaid, though funded partly by the feds, is run at the state level — that’s why the Supreme Court decided that states must be able to opt out of Obamacare’s expansion of Medicaid. At the end of the day, the states are on the hook for running the program. It’s also worth noting that some publicly traded companies, like Centene CNC -7.41% and Molina Healthcare, are in the business of running Medicaid plans.

And Medicare, too, is not a centralized system. Many decisions about what will and won’t be covered are made centrally in Washington. But many are not, with ten different coverage regions working autonomously. Again, private sector companies do a lot of the administration. And Medicare is in some ways prohibited from using its heft to negotiate lower prices. A newsy example: Medicare can’t negotiate lower prices on drugs, even if a company prices a treatment at an exorbitant level.

This combination, a bigger, more competitive market and a centralized government program that can negotiate low prices for the poor, sounds both a lot like what we have and very different. It would require solving the central problem of American health care: controlling costs. Ironically, removing our employer-based insurance system might really help, but most voters, including me, are scared to give it up. It also, it should be noted, sounds a lot more like a traditionally Democratic plan than a Republican one. But, though it may be an example, as 60 Minutes‘ Scott Pelley put it, of Trump shooting “from the lip,” it’s one of the most radical proposals of the campaign.

Aside from, of course, Trump’s plan to build a massive wall to prevent illegal immigration and his plan to cut the tax rate for much of the middle class to zero, that is.