Republican presidential candidate Donald Trump’s employees are having a “tremendous problem” with health plans they don’t actually have. Trump himself doesn’t make much use of a health plan that he also doesn’t have. And all of this is a “disaster” for the American people.
Confused? Don’t worry. So is Mr. Trump.
At an event at one of his Florida properties on Tuesday, Trump claimed that “all of my employees are having a tremendous problem with Obamacare.” He also implied that these employees are facing massive premium hikes due to the Affordable Care Act.
Trump also went on Fox News to discuss his own experience with the president’s signature health law. “I don’t use much Obamacare,” Trump claimed, “because it is so bad for the people and they can’t afford it.”
Both of these statements suggest that Trump does not understand very basic things about America’s health system — or even how his own companies are run. Neither the overwhelming majority of the employees Trump referred to nor Trump himself receives health insurance through a program created by Obamacare.
What Obamacare actually does
In fairness, Trump may not understand basic things about health policy because the American health system is a needlessly complicated mess. Prior to the Affordable Care Act, most Americans received health insurance — if at all — through a complicated web of government programs and employer-provided plans. Americans over 65 are covered by Medicare. Veterans might receive health care through a system set up for their benefit. Low-income Americans might receive coverage through Medicaid, but that often depended on the generosity of their state government. Meanwhile, most working Americans received tax-subsidized health insurance through their employer.
The minority of Americans who were unfortunate enough not to receive health insurance through any of these sources were dumped into the individual market — a relatively unregulated cesspool where insurers were free to deny coverage to people with preexisting conditions. Or to charge someone significantly more because of their age. Or because they are a woman.
Obamacare sought to plug many of the holes created by this arcane system. Its two most important prongs are a Medicaid expansion that sought to provide health benefits to everyone below a certain income level (this expansion was later weakened by the Supreme Court), and a new regulated marketplace for people previously left to the sharks in the individual market. In this new marketplace, insurers can no longer discriminate against people with preexisting conditions, and people who earn less than 400 percent of the poverty rate ($97,200 for a family of four) receive subsidies to help them pay their health premiums.
Trump’s employees — or, at least, the overwhelming majority of the employees at the property where Trump spoke — are not insured through either of these programs. David Feder, the general manager of that property, told the Wall Street Journal that virtually all of the property’s employees receive insurance through their employer. So it is far from clear how they could be having a “tremendous problem with Obamacare.”
Similarly, Trump’s statement that he does not “use much Obamacare” is not especially revealing. Trump himself is 70 years old, and thus is eligible for Medicare. And assuming Trump’s other properties offer similar benefits to the one managed by Feder, his employees would not need to “use” Obamacare either because they will have employer-provided plans.
Obamacare’s quiet success
In fairness, the Affordable Care Act does impose some new obligations on employers — it requires health plans to provide a certain level of benefits, for example. These changes to the law, however, have not led to price spikes in the employer-provided insurance market. Far from it, in fact. As Michael Grunwald explains, “the average annual premium increase since Obamacare became law in 2010 has declined 40 percent compared to the increases of the previous decade, saving the average family nearly $3,600 a year.”
Indeed, most of the news in the aftermath of the ACA’s passage is positive. The percentage of Americans without insurance is at a record low. Health inflation has slowed considerably since the Affordable Care Act became law. Most Americans are either better off or similarly situated to where they would be if Obamacare had never been signed.
Indeed, even in the Obamacare marketplaces, which have been the focus of multiple recent reports about premium spikes, prices are still 20 percent lower than the Congressional Budget Office predicted in 2010, when Obamacare became law.
Nevertheless, it is true that a small minority of Americans will see higher prices. The average premium for the Obamacare marketplace’s benchmark plans will increase 25 percent next year. That’s a lot, but it is mitigated by several factors. One is that most consumers in the marketplaces will see only a negligible amount of this increase thanks to the subsidies they are eligible for under Obamacare. A very small fraction of Americans — “a population roughly equivalent to Idaho’s,” according to Grunwald — will feel these premium spikes. But those will largely be relatively well-off Americans who earn too much to receive Obamacare subsidies but also do not receive health care through their employer or through a government program.
That’s not to say that there are not real policy challenges facing the Obamacare marketplaces right now, or that these challenges will not need to be addressed by the next president. It is simply to say that these challenges largely impact a small, relatively affluent population. And that few, if any, of the people in this population work for Donald Trump.
In any event, addressing these challenges will require a robust understanding of multiple health care markets, how they interact with a slew of government programs, and how the law can be tweaked without setting off new problems with scary names like an “adverse selection death spiral.”
Meanwhile, Donald Trump does not appear to know the first thing about how Obamacare works.