Trump health care ideas sound like a lot like Obama’s

March 06--President Donald Trump's principles for guiding Congress through a Republican reform of health care sound familiar to Cyril Chang, an economics professor at the University of Memphis Fogelman College of Business and Economics who focuses on health care.

Of the president's five principles, the first three show that former President Obama's Affordable Care Act reform has firmly defined and shaped the American health care debate, Chang said by e-mail.

Pre-existing conditions, helping people purchase health insurance and Medicaid expansion that also gave several states flexibility to structure their own plans are examples.

Chang offered a point-by-point reaction to the health care principles Trump outlined last week in his joint address to Congress, edited here for brevity:

Trump: First, we should ensure that Americans with preexisting conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the healthcare exchanges.

Chang: Obamacare will be forever remembered as the health care reform that bars insurance companies from using pre-existing conditions as a reason for denying coverage. Candidate Trump repeatedly said the same thing and he, as the new president, has reaffirmed this principle favored by most Americans.

Trump: Secondly, we should help Americans purchase their own coverage through the use of tax credits and expanded Health Savings Accounts -- but it must be the plan they want, not the plan forced on them by our government.

Chang: Obamacare uses income-based direct subsidies to help middle- and low-income Americans buy health insurance. President Trump favors using refundable tax credit for the same purpose. The goal is the same but the two approaches have different winners and losers. The Trump tax credit favors higher-income Americans because the size of credit will depend on age and not on income under the Trump administration.

Trump: Thirdly, we should give our great state governors the resources and flexibility they need with Medicaid to make sure no one is left out.

Chang: The Trump administration has proposed to turn Medicaid into a block grant program, giving states more say in how to spend the federal dollars. The block grant program will be based on a per capita cap thus limiting the federal government financial exposure to the health care needs of low-income Americans. The block grant program may also reduce the growth of federal support for Medicaid. Thirdly, the distribution formula proposed will favor states that have expanded Medicaid and disadvantage states that did not expand Medicaid including Tennessee.

Trump: Fourth, we should implement legal reforms that protect patients and doctors from unnecessary costs that drive up the price of insurance, and work to bring down the artificially high price of drugs, and bring them down immediately.

Chang: This point seems to suggest some form of malpractice reform. The threat of malpractice law suits is a real problem, especially for physicians and hospitals. Tort reform is long overdue, but it's a long-term project that cannot be expected to produce immediate relief. Yes, Medicare should be allowed to negotiate drug prices with pharmaceutical companies.

Trump: And finally, the time has come to give Americans the freedom to purchase health insurance across state lines...which will create a truly competitive national marketplace that will bring costs way down and provide far better care. So important.

Chang: Allowing Americans to buy health insurance across state lines is something that sounds great on the surface. In practice, this proposal is fraught with difficulties and pitfalls.

First, regulation of health insurance products is a state matter since the passage of the McCarran -- Ferguson Act of 1945. Different states have different rules about types of insurance products allowed in a state and how much benefits policies should cover. For buying insurance across stateliness to happen, Congress must repeal McCarran-Ferguson. States are opposed to this repeal.

President Trump has endorsed the principle of giving states more flexibility. You cannot have it both ways. Furthermore, insurance companies may not be eager to expand selling insurance across state lines beyond what they are doing now (many insurance companies have already set up state subsidiaries to sell policies in different states). Insurance is a local business. Out-of-town competitors have problems competing with local companies because they don't have the local advantage of setting up adequate provider networks.

___

(c)2017 The Commercial Appeal (Memphis, Tenn.)

Visit The Commercial Appeal (Memphis, Tenn.) at www.commercialappeal.com

Distributed by Tribune Content Agency, LLC.