Trump’s Health Care Vision, or Lack Thereof

Trump’s Health Care Vision, or Lack Thereof

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Plus, the $5 part causing a $725 million problem
Thursday, September 26, 2019

Trump to Issue Executive Order Allowing Prescription Drug Imports: Report

President Trump will soon issue an executive order allowing the importation of some prescription drugs, The Washington Post reports, citing senior administration officials.

The Department of Health and Human Services issued a plan this summer outlining a path toward allowing drugs to be imported from Canada or other countries.

Trump’s announcement, the Post’s Paige Winfield Cunningham writes, will be part of a broader presidential address outlining Trump’s vision for the U.S. health-care system and contrasting his plan with calls by some Democrats for a shift to Medicare for All.

More from Winfield Cunningham:

“The executive order may call upon federal agencies to find ways to strengthen the private plans offered through Medicare Advantage, a popular alternative to traditional Medicare that covers about one-third of seniors. One way could be to let Medicare Advantage plans offer a wider array of medical benefits.”
“The president will also call for opening the door to drug imports from other countries to bring down the price of medicines purchased by Americans  — a proposal Democrats have typically supported and might find difficult to criticize.”

A piecemeal reform plan: While Trump may again call for full repeal of Obamacare — he has pledged to repeal the law if he is re-elected and Republicans retake full control of Congress — he likely won’t be unveiling a comprehensive replacement plan. Instead, White House officials tell the Post, Trump will emphasize plans he’s already announced. “This is a series of actions and proposals that, when pieced together, will be our plan for reforming health care,” one unnamed official told the Post. “If you guys think we’re going to drop a bill overnight, that would be the wrong impression.”

Why it matters: That Trump administration approach could heighten the chaos in the health-care system if the U.S. Court of Appeals for the 5th Circuit strikes down the Affordable Care Act in an ongoing Republican-led lawsuit challenging the constitutionality of the law. The court is reportedly expected to rule next month, with an appeal to the Supreme Court likely to follow no matter how it rules.

For more on Trump’s health-care agenda, see this new piece from Larry Levitt of the Kaiser Family Foundation.

Senate Passes Short-Term Funding Bill to Avert Shutdown at the End of the Month

The Senate on Thursday passed a short-term spending bill to fund the government through November 21. Approved by the House last week, the continuing resolution passed by an 82-15 margin.

President Trump is expected to sign the bill in the next few days, avoiding a potential government shutdown when the current fiscal year ends on September 30.

Chart of the Day: Continuing Resolutions and the Military

With congressional appropriators mired in disagreements about funding details for fiscal year 2020 and an ongoing clash over providing money for President Trump’s border wall, lawmakers may well have to resort to a year-long series of stopgap spending bills to avoid another government shutdown.

Echoing previous warnings from both military leaders and appropriators, Mackenzie Eaglen, a resident fellow at the conservative-leaning American Enterprise Institute, argues that those continuing resolutions would harm the military by freezing spending at current levels and setting restrictions on other purchases.

“Not only are troops and their families affected by the shifting of funds for the wall, the entire Defense Department would be harmed under the larger stopgap spending bill at lower levels,” Eaglen writes. “This lack of on-time funding throws the government’s largest purchaser into a tailspin and raises costs to the taxpayer for inefficiency.”

Here’s Eaglen’s chart detailing how much time the military has been funded under a continuing resolution in recent years:

Quote of the Day: The Health Care Revolution That Wasn’t

“The fact is very little medical care is shoppable. We become good shoppers when we are repeat shoppers. If you buy a new car every three years, you can become an informed shopper. There is no way to become an informed shopper for your appendix. You only get your appendix out once.”

— David Newman, former director of the Health Care Cost Institute, quoted in an article Thursday by Noam Levey of the Los Angeles Times.

Levey says the “consumer revolution” in health care – in which patients shop around for the best prices, forcing doctors, hospitals and pharmaceutical firms to compete with lower prices – hasn’t materialized, but the higher deductibles that were part of the effort are very much in effect. “High-deductible health insurance was supposed to make American patients into smart shoppers,” Levey writes. “Instead, they got stuck with medical bills they can't afford.”

Chuck Grassley Says Drug Pricing Bill Key to GOP Keeping Senate Majority

Senate Finance Committee Chairman Chuck Grassley (R-IA) told reporters Wednesday that passing legislation to lower prescription drug prices will be essential if Republicans hope to hold onto their Senate majority. But he said the bipartisan drug pricing bill he has put forth with Democratic Senator Ron Wyden of Oregon will probably get pushed to early next year, Politico reports.

Grassley expressed optimism that he could convince Republicans opposed to his legislation to back it, especially given that they’re adamantly against House Speaker Nancy Pelosi’s proposal calling for the government to negotiate drug prices.

"Eventually it will come down to this I think, there are 22 Republicans up for election this year and if it's like in my state ... there is a great deal of disgust with the rapidly increasing prices of drugs and every Republican up for reelection is going to have a place to land and this is the place to land because they are surely not going to land with what Pelosi is doing. And so if McConnell wants to keep the Republican majority, then this drug pricing bill is part of that plan," Grassley said.

Grassley said he is working on a compromise with House Democrats.

The Economic Logic Behind Bernie Sanders’ Aggressive Wealth Tax

Bernie Sanders’ proposed tax on extremely wealthy households has eight progressive tiers, starting with a 1% levy on wealth over $32 million and topping out at an 8% tax on wealth over $10 billion. Slate’s Jordan Weissmann says that there is a logic to Sanders’ complex formulation: On average, America’s billionaires would face a roughly 6% tax rate on their wealth, which is close to the optimal level for raising revenue, according to economists Emmanuel Saez and Gabriel Zucman.

“Saez and Zucman have shown that the wealth tax rate on billionaires at 6.25 percent maximizes revenue for the government,” Weissmann writes. “Go higher, and it will raise less cash for the government over time by crimping the fortunes of the rich.”

The 6% average tax rate on billionaires could also help limit the growth of wealth inequality, Weissmann says, referring to one of the explicit goals of Sanders’ plan. “In recent years, Saez and Zucman note, the richest U.S. households have seen their wealth grow at a rate about 4 percentage points faster annually than the average family’s. [Elizabeth] Warren’s plan would erase part of that gap. Sanders’, they say, would erase it ‘entirely.’”

Defective $5 Part in US Nuclear Bombs Could Cost $725 Million to Fix

Defense officials said Wednesday that an inexpensive electrical capacitor used in some new nuclear bombs in the U.S. arsenal has proven to be defective, requiring a months-long replacement effort that could cost more than $725 million.

The $5 part has been used in the B61-12 gravity bomb and the W88 submarine-launched warhead, according to Roll Call, but tests in April revealed electrical problems that have been traced to the capacitor.

The faulty component is being replaced with one that costs $75, but the repair requires more than simply swapping out parts, since the defective capacitor caused a series of other problems in the weapons. Solving them all will cost $600 million to $700 million for the B61-12 bombs, and $125 million to $150 million for the sub-launched missile warheads.

The faulty capacitor is a commercial-grade part, said Charles Verdon, deputy administrator for defense programs at the Energy Department’s National Nuclear Security Administration, and some experts are worried that the U.S. is relying too much on the commercial marketplace in its nuclear weapons programs. About 70 percent of the parts in U.S. atomic weapons come from the commercial market, a major shift from the Cold War era, when most parts were made in government facilities, Verdon told Congress at a hearing Wednesday.

Lawmakers were not pleased to hear the cost of fixing the problem. “In rough figures, due to the effect of a failure in a component that costs less than $100, taxpayers will face charges on the order of close to $1 billion,” said Rep. Jim Cooper (D-TN), chair of the Subcommittee on Strategic Forces.


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