Candidates Use Broad Strokes to Paint Health-Care Policy Picture

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By Nathaniel Weixel

March 4 — Health care has been mostly absent from the 2016 presidential campaign as Republican candidates focus on immigration and terrorism and Democratic candidates focus on the economy and jobs.

But now that Republican front-runner Donald Trump has finally released a health plan, after being heavily criticized by his rivals in debates for not having one, the issue can at least expect a bump in attention.

So where do the top candidates from both parties stand on health-care issues? There's not much that separates Trump's seven-point plan from those put forward by his Republican rivals. Democratic candidates have offered more ideas, like tax credits for families to help reduce out-of-pocket costs, but they're also light on some specifics.

In the area of Medicare, all the candidates have vowed to protect the program, but in different ways. On the Republican side, Trump has said he won't cut Medicare, while Sen. Ted Cruz (Texas) would raise Medicare's eligibility age and Sen. Marco Rubio (Fla.) would privatize the program. On the Democratic side, Sen. Bernie Sanders (I-Vt.) would socialize it, and former Secretary of State Hillary Clinton wants to prevent any radical changes.

Repeal ACA, or Build on it?

Republican candidates are united in their desire to repeal the Affordable Care Act. Generally, the Republican candidates also support increasing the use of health savings accounts, allowing health insurance to be bought across state lines and banning pre-existing condition exclusions by insurance companies for beneficiaries who maintain continuous coverage.

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Economy Jobs is top voter issue

The Democrats are more divided. Sanders wants to move beyond the health reform law to shift the country into a single-payer system. Clinton has committed to keeping and improving the ACA, while once again advocating for a public option, which would create a government-run insurance plan to compete with the private market.

The public is equally divided. According to a February Kaiser Family Foundation health tracking poll, more Americans (36 percent) said policy makers should build on the existing law to improve affordability and access to care than any other option presented. Sixteen percent said they would like to see the ACA repealed and not replaced, 13 percent said it should be repealed and replaced with a Republican-sponsored alternative, and 24 percent say the U.S. should establish guaranteed universal coverage through a single government plan.

According to the Kaiser poll, the economy/jobs was the most important issue in the 2016 election to voters across parties. Health care ranked fourth among Democratic and independent voters, but fifth among Republicans.

It's likely candidates will provide more details when the party nominations are secured in July, but some experts doubt specifics would emerge even then.

Repeated requests for comment by Bloomberg BNA to the candidates' campaigns were not returned.

Not a Republican Primary Priority

According to interviews with leading policy experts and former government officials, voters in the Republican primaries don't see the lack of detail as a bad thing. Primary voters just aren't very focused on health policy, so “repeal Obamacare” is more than enough information.

“Campaigns don’t lend themselves to detailed policy proposals. Repeal of the ACA has been a straightforward message,” Elizabeth Carpenter, vice president at the consulting company Avalere Health, told Bloomberg BNA.

Republican primary voters care much more about national security, terrorism threats and immigration, Thomas Miller, a resident fellow at the American Enterprise Institute (AEI) told Bloomberg BNA. “What moves the needle for voters isn’t the third or fourth details on health policy,” he said. “You’re not going to invest as much time in that if it’s not significant to this group of voters in the primary.”

Republicans can’t one-up one another on how much they hate the ACA, Drew Altman, president and chief executive officer of the Kaiser Family Foundation told Bloomberg BNA. The candidates “can’t distinguish themselves when their basic position to try and rally the base is to be against Obamacare. Health isn’t an issue for the candidates that voters can distinguish them on. And they know that.”

“Politically, repeal, repeal, is all you need to say,” Thomas Scully, an attorney at Alston & Bird LLP, said. “Jeb [Bush] had a detailed plan and nobody cared, so why should anybody else?” Scully was administrator of the Centers for Medicare & Medicaid Services from 2001 to 2003.

Scully said it's possible that health care never rises to become a major issue for Republicans in this election.

“This wouldn’t be the first time that nobody gets into the weeds on health care in a presidential election,” Scully said. “For better or worse, there’s nobody clamoring for detail aside from repeal Obamacare or keep Obamacare.”

Gail Wilensky, a health economist and senior fellow at Project HOPE, said that in an ideal world, candidates should propose a way to close the coverage gap, shield seniors from drug prices and make Medicare solvent to keep pace with aging baby boomers. Wilensky was head of the Health Care Financing Administration, the precursor to the CMS, from 1990 to 1992.

“The focus, not surprisingly, isn’t on that level of detail of either side,” Wilensky said. “Democrats will get it into the conversation, it's their issue,” but the ACA just isn't ranking in national polling.

REPUBLICANS
ACA Replacement

There have been some clues from candidates about the future of the ACA, made in speeches and from their policy positions. Some candidates have broad outlines on what they'd replace the ACA with, and “some have less than an outline. [But] I don’t see it hurting them,” Douglas Holtz-Eakin, president of the conservative American Action Forum, told Bloomberg BNA in an interview. Holtz-Eakin was director of the Congressional Budget Office from 2003 to 2005.

Rubio has the most detailed ideas for an ACA replacement, according to Wilensky and Scully. Rubio wants an advanceable, refundable tax credit that can be used to purchase insurance. Rubio has indicated he will provide coverage for those with pre-existing conditions through state high-risk pools. The idea isn't exactly revolutionary—it was part of John McCain's health proposal in 2008, and has been included in some congressional plans to replace the ACA.

Rubio has also talked about trying to equalize the subsidy for employer-sponsored insurance, to have it be comparable to the subsidies on the individual marketplace. Wilensky said the Rubio campaign has been one of the only ones to attempt to take on that issue. Rubio also want to sell insurance across state lines, but it's not a new idea and experts have dismissed it as too small a proposal to cover the amount of people that would need insurance once the ACA is repealed.

Scully said that while Rubio talks about completely replacing the ACA, his campaign ideas suggest otherwise.

“The fact he’s talking about insurance pools, refundable tax credits—that’s kind of the core methodology of Obamacare,” Scully said. “He’s doing something aside from throwing Obamacare out the window.”

Rubio talks about substitute policies for the current levels of coverage, Wilensky said.

“If you only mention HSAs, insurance across state lines, pre-existing conditions—[you're] not explaining what would happen to people who lose employer-sponsored insurance.” There's no precedent for how to replace all the benefits of a program that has been in place for three years, she said.

“[Republicans are] not going to be able to roll back Medicaid and the exchange benefits. Unless they want to get wiped out in 2018. Rhetoric is rhetoric,” Scully said.

Cruz once shut down the government in an effort to defund the ACA, and last year introduced legislation in the Senate to remove all the ACA's insurance mandates and allow the sale of insurance across state lines. The legislation was intended to serve as a replacement for the ACA if the Supreme Court invalidated the law's mandates in its King v. Burwell decision.

Cruz at the time acknowledged that his bill wouldn't have repealed the entire law, but said that was the ultimate goal. “Every last word of Obamacare must be repealed,” he said. “And while we continue that fight, we must also send bill after bill to the president's desk to stop its harmful effects.”

The Trump Difference

Trump's plan, unveiled March 2 after a resounding victory in the March 1 Super Tuesday primaries, echoes many of the standard Republican talking points. He's a fan of “getting rid of the lines” between states, so his plan allows the sale of insurance across state lines.

The Trump plan also encourages the use of tax-free HSAs. He has said he wouldn't cut Medicare, but his plan doesn't address how to reform it. It also does not address how Trump would cover the uninsured once he completely repeals the ACA, or how he would address pre-existing conditions. The plan mentions requiring “price transparency from all healthcare providers” to allow consumers to shop for the best prices, but doesn't describe what that actually means.

Whereas Rubio would offer a tax credit, the Trump plan calls for individuals to fully deduct health insurance premium payments from their tax returns, which experts have said benefit the wealthy more than the working class. Like Rubio and Cruz, Trump also doesn't address how he would pay for his plan.

Trump has said Obamacare is “very bad” and needs to go. “I would end Obamacare and replace it with something terrific, for far less money,” he has said.

Yet his comments have reflected a slightly more liberal approach to the ACA than those of the other GOP candidates. Trump has expressed a desire for Medicare to negotiate drug prices—an idea that generally has been embraced by Democrats. He also appeared to back the ACA's individual mandate—although he later backtracked.

“Trump is not inhaling the limited government, free-market approach [to replacing the ACA] other candidates are supporting,” AEI's Miller said. “Trump thinks it’s all a huge negotiation. A nationwide competition without state boundary lines getting in the way.”

Prescription Drugs

Republicans have tended to stay out of the prescription drug pricing debate, aside from general criticisms of drug companies or government regulations. Holtz-Eakin said drug pricing is more of Democratic issue, because Republicans don't want to be viewed as favoring government price controls. “It's a terrible idea, and as a matter of policy [Republicans] are not going to do that,” Holtz-Eakin said.

Cruz has supported legislation to remove barriers within the Food and Drug Administration that he has claimed make it “risk averse.” He wants to promote “supply side innovation,” promote faster approval of certain drugs, and invest more money into research. Rubio has mentioned the lack of generic competition for certain drugs as a reason for high prices, and has criticized certain companies for “profiteering.” But he doesn't have a specific plan to address costs.

Despite saying on multiple occasions that Medicare could save money by negotiating prescription drug prices, Trump's official plan doesn't mention the idea. The plan does call for importing cheaper drugs from foreign countries—another idea usually championed by Democrats, though Sen. John McCain (R-Ariz.) was a supporter of the idea during his 2008 presidential bid.

Having Medicare negotiate drug prices is “a good populist idea, so I guess that’s why it’s here [in Trump's campaign],” Wilensky said. “There's no real indication of what it means when he talks about it, or when Democrats do, because Medicare doesn’t have any experience negotiating prices.”

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2016 candidates on healthcare

Medicare, Medicaid

“It’s a sport to find where Trump stands on health,” Kaiser's Altman said. “He won’t touch Medicare or Medicaid. He wants to give Medicare the power to negotiate drug prices, but he's with Republicans on getting insurance across state lines.”

In order to keep Medicare fiscally sustainable, Rubio wants to gradually increase the eligibility age and transition Medicare to a premium-support system, where the federal government pays for people to enroll in private health plans.

“Medicare should be transitioned into a premium support system, empowering seniors with choice and market competition, just like Medicare Advantage and Part D already do,” Rubio wrote in a 2015 Fox News op-ed. He advocates strengthening Medicare Advantage and making the Medicare trust fund permanently solvent. He hasn't explained how he would accomplish any of it, or pay for it.

Cruz hasn't been as specific, but has said he wants to raise Medicare's eligibility age.

Rubio also has proposed giving states a per-capita Medicaid block grant. Under the proposal, states would receive a fixed dollar amount per beneficiary. Caps could vary for different groups of people, such as the aged, blind, people with disabilities, children and adults. Trump also said Medicaid should be given to states as a block grant, but he didn't specify it should be per-capita.

While using block grants for Medicaid is a familiar idea, specifying that they be based on per capita “is at least not ridiculous,” Wilensky said.

When Republicans say they want to block grant Medicaid, “that usually sends Democrats into orbit,” Scully said. But basing grants on a state's population gives more flexibility in case of a recession. “I would give Rubio a little more credit” for specifying the grants be per capita, Scully said.

DEMOCRATS

On the Democratic side, Clinton and Sanders have been a little more detailed regarding what their health plans would look like.

Clinton has made it a point to tie her campaign to improving the ACA, while Sanders has been vocal about replacing it with a revolutionary, single-payer “Medicare For All” idea. They both have promised to lower drug prices by increasing government regulations to spur competition among pharmaceutical companies.

“Hillary Clinton has maybe 20 separate proposals, but each are a paragraph. In the end, they represent an overall plan that builds on the ACA but moves beyond the ACA as well,” Altman told Bloomberg BNA. “They represent a significant set of incremental proposals. They focus more on pocketbook issues, like drug prices.”

For example, Clinton suggests expanding Medicare bundled payments to promote value of care over the volume of care— but doesn't get much more detailed.

Sanders's single-payer “Medicare for All” proposal would cover every American under a single government-administered health insurance plan that would provide a comprehensive set of benefits with no cost sharing. The plan would move essentially all health-care spending from private and public sources onto the federal budget.

Sanders said he also proposed several tax increases that his campaign said would fully offset the cost of the plan, which the campaign estimated at just under $14 trillion over 10 years.

Single Payer

According to his campaign policy positions, Sanders's plan “will cover the entire continuum of health care.”

On the surface, it sounds appealing. But “Medicare-for-all has been debated for many years and has failed to gain traction. I think it remains unlikely that such a proposal would gain traction in Congress,” Avalere's Carpenter told Bloomberg BNA.

The “Medicare-for-all” term is also a misnomer. Medicare has copayments and deductibles; the Sanders plan doesn't. Medicare also covers far fewer services than what Sanders proposes. There's also the issue of reimbursements—Medicare reimburses hospitals at different rates than Medicaid or private insurance. If all care was reduced to Medicare pricing, experts have warned some hospitals would be forced to close because of low reimbursements.

The Sanders campaign has said that moving to single-payer system would reduce national health spending by $10 trillion due to reduced administrative costs, reduced prices for pharmaceuticals and medical devices and controls on administrative costs and drug prices.

The Sanders plan calls for a combination of taxes on workers, employers, investors, estates and high earners. Marc Goldwein, vice president of the Committee for a Responsible Federal Budget, told Bloomberg BNA those taxes wouldn't raise near as much money as the campaign says they would.

Goldwein credited Sanders for having such a detailed a plan on how to pay for health care, but mainly because he has been the only candidate to propose such a massive increase in federal spending.

“He is talking about a huge expansion beyond Obamacare,” Goldwein said.

Goldwein said he's concerned the Sanders campaign is making big promises about how easy it would be to pay for the candidate's health plan that aren't accurate. A significant aspect of the pay-for includes increasing taxes on the highest earners, and while significant revenue can be generated from high earners, there are limits, Goldwein said.

“The top 1 percent is tapped out under their plan,” Goldwein said. “It's important for the public to understand the cost.” It's not as easy to pay for as the campaign has made it seem, he said.

Public Option

Clinton has renewed her support for a so-called “public option.” Clinton said she would work with “interested governors, using current flexibility under the Affordable Care Act to empower states to establish a public option choice.”

While less liberal than the Sanders campaign's single-payer promise, it would still have a difficult time getting through Congress. A public option was initially part of discussions when the ACA was being negotiated, but lawmakers eventually realized there wasn't political support for it, especially among moderate Democrats. Progressives supported it as a voluntary transition toward single-payer insurance, while conservatives opposed it as a government takeover of health care.

However, there's nothing to stop states from deciding to implement a public option on their own insurance exchanges.

Clinton also proposed reducing the cost of purchasing health insurance on the ACA exchanges by providing a tax credit of up to $5,000 per family to offset a portion of excessive out-of-pocket and premium costs above 5 percent of their income. She also would enhance the premium tax credits now available through the exchanges so that eligible beneficiaries would pay less of a percentage of their income than under current law, and she would ensure that all families purchasing on the exchange wouldn't spend more than 8.5 percent of their income for premiums.

Whether it's single payer or a public option, Altman said neither campaign has presented anything that could be considered an actionable plan.

“We're mostly having a debate about general ideas and words and concepts,” Altman said. “Nobody should mistake it for the kind of” debate we would have if single-payer or a public option-type legislation ever made it before Congress. “We’re not debating plans, just the general approaches of candidates.”

Prescription Drugs

Rising prescription drug prices are stoking voters' anger this election cycle as new, highly expensive medications are hitting the market while the prices of some older drugs— like Turing Pharmaceutical's Daraprim—are skyrocketing. Federal data show drug spending rose substantially in 2014, after four years of static to modest growth.

Both Clinton and Sanders want Medicare to negotiate drug prices. Medicare currently doesn't have that authority—it was banned when Part D was added to the Medicare program in 2003. The Congressional Budget Office has declined to score any proposals, and has said lifting the ban “would have a negligible effect” on cost.

Having Medicare negotiate drug prices “plays in the debate as a much bigger idea” than it really is, Altman said.

Both campaigns also want to require drug companies to offer minimum rebates off the sticker price in order to participate in Medicare, at least for lower-income beneficiaries.

Sanders and Clinton both have proposed importing drugs. One key obstacle to importation has been the inability to assure the quality of drugs, and federal officials in administrations going back to Bill Clinton's have warned against the policy. Both candidates also want to prohibit “pay-for-delay” deals between brand and generic drugmakers. These are deals in which drugmakers with patents that are nearing expiration pay companies to delay the introduction of a generic version of their drug.

Hillary Clinton’s plan aims to stop drug companies from overcharging customers, while also preventing insurance companies from passing on those costs.

For example, Clinton would require health insurance plans to place a monthly limit of $250 on covered out-of-pocket prescription drug costs for individuals. Clinton would also require drug companies to spend a certain amount of their revenue on research or pay a rebate “to support basic research,” presumably through the National Institutes of Health or similar entities. Six states currently have a similar policy.

Clinton's plan was blasted by the drug lobby, the Pharmaceutical Research and Manufacturers of America.

“Secretary Clinton’s proposal would turn back the clock on medical innovation and halt progress against the diseases that patients fear most. These sweeping and far-reaching proposals would restrict patients’ access to medicines, result in fewer new treatments for patients, cost countless jobs across the country and erode our nation’s standing as the world leader in biomedical innovation,” the group said in a statement.

Many aspects of the plans offered by both candidates have been proposed in Congress in previous years, and have yet to pass.

To contact the reporter on this story: Nathaniel Weixel in Washington at nweixel@bna.com

To contact the editors responsible for this story: Lisa Rockelli at lrockelli@bna.com, Steve Teske, Brent Bierman