Four Takeaways on Trump’s Medicare Executive Order

Four Takeaways on Trump’s Medicare Executive Order

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Plus, how much would Trump’s snake-filled border moat cost?
Friday, October 4, 2019

Four Takeaways on Trump's Medicare Executive Order

In signing an executive order on Medicare Thursday, President Trump sought to portray himself as a protector of the health-care program for seniors.

Trump’s order, which the administration said was aimed at “protecting and improving Medicare,” calls for expanding supplemental benefits offered through private Medicare Advantage plans, increasing use of telehealth services, reducing regulations, eliminating fraud and providing faster access to innovative therapies. (You can find more details about Trump’s speech and executive order here or here.)

None of the changes in Trump’s order will take effect right away, as they all allow for new proposals or rules to be developed over time. But here are four immediate takeaways:

Trump as protector of Medicare might be a problem for conservatives: Ronald Reagan decried Medicare as socialism in the mid 1960s. Now Trump says he is protecting Medicare against socialism in the form of Democratic Medicare-for-All plans. “Trump positioned himself as the guardian of the government healthcare program for seniors that Republicans originally opposed as socialism and have long sought to overhaul,” the Washington Examiner’s Kimberly Leonard notes. “Conservatives generally point out that Medicare faces significant funding problems and that it's one of the biggest drivers of the country's debt.” But Trump’s positioning could undercut future GOP efforts to change Medicare.

Trump didn’t do much to really protect Medicare longer-term: “When asked about how the Trump administration would help assure Medicare's sustainability in the long term, something officials said was part of the president's executive order, health officials pointed to reductions in premiums for prescription drugs and reductions in ‘burdensome’ regulations,” Leonard writes. “Seema Verma, administrator of the Centers for Medicare and Medicaid Services, said on Twitter that overhauling regulations would save almost $6 billion over the next decade.” But Medicare’s projected financing shortfall is much, much bigger than that, totaling some $40 trillion over the next 75 years.

Trump might actually be undermining traditional Medicare: “Trump’s executive order is a stealth attack on the very program he’s swearing to protect,” Los Angeles Times columnist Michael Hiltzik says. “Buried within the order is a provision that would destroy Medicare by driving its costs to an unsustainable level.”

That provision orders the secretary of Health and Human Services to study ways to modify traditional Medicare payments “to more closely reflect” Medicare Advantage and private insurance prices. Larry Levitt of the Kaiser Family Foundation warned on Twitter that the pricing provision “would increase the cost of Medicare enormously, since private insurers pay much higher prices than Medicare.” And Hiltzik argues that “it makes no sense to tie Medicare prices to a market model that so relentlessly inflates costs and thereby collects fatter profits for private participants.”

Similarly, Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, suggests that the language in the Trump executive order reads like its goal “is to make Medicare much, much more expensive by providing a huge windfall to hospitals.” But, he adds, there may be another way to read the order: “The alternative reading here is that the intent is just to apply private insurance prices to Medicare when they're lower, which I hope is the case. We'll see when this study comes out.”

Setting aside that provision, the Trump administration’s push for Medicare Advantage plans raises alarms among some Medicare advocates that it’s pursuing stealth privatization of the traditional health-care program for seniors.

Overall, there’s less here than Trump would like you to believe: What Trump laid out was “a fairly normal, fairly vague policy statement with no real implications for 2020,” Axios’s Caitlin Owens writes. Yes, Trump’s push to expand private Medicare Advantage plans over traditional Medicare matters, and it has implications for federal spending, given questions over how effective private Medicare plans are at containing costs. But Trump didn’t announce any new plans to lower drug prices. And he did little to detail an alternative big-picture vision for the U.S. health-care system or to address the broad systemic questions plaguing the health-care industry. “Plenty of what the Trump administration has said is hyperbole, untrue or unknowable,” Owens writes. “And the policy the administration rolled out has little to do with these big-picture issues.”

Chart of the Day

From the Kaiser Family Foundation:

Number of the Day: 27%

Approximately 27% of U.S. adults between the ages of 18 and 64 — or about 54 million people — have a pre-existing medical condition that would have made them uninsurable before the Affordable Care Act, according to a new analysis by the Kaiser Family Foundation. The number is significant because an impending federal appeals court ruling in a case challenging the constitutionality of the Obama health law and its provisions protecting patients with pre-existing conditions. “While we cannot predict how the court would fashion relief if these ACA provisions were overturned, access to individual market insurance for people with pre-existing conditions could be seriously reduced,” the Kaiser analysis notes.

How Much Would a Snake-and-Alligator-Filled Border Moat Cost Anyway?

President Trump has asked his staff to investigate some pretty extreme options related to border security, according to a forthcoming book by Michael D. Shear and Julie Hirschfeld Davis of The New York Times. “Privately, the president had often talked about fortifying a border wall with a water-filled trench, stocked with snakes or alligators, prompting aides to seek a cost estimate,” the journalists wrote in the Times on Wednesday.

Trump stridently denied the report — “I may be tough on Border Security, but not that tough. The press has gone Crazy. Fake News!,” he tweeted Wednesday — but that didn’t stop Peter Singer, a defense strategist at the liberal New America foundation, from thinking about the cost estimate White House aides reportedly worked on. Whether the president wants it or not, how much would the U.S. have to spend to build a moat filled with snakes and alligators along the border with Mexico?

According to Singer’s quick, tongue-in-cheek analysis, the federal government could stand up a Snake and Alligator Border Guard for about $2.5 billion, with operating costs of about $1.8 billion a year. Here’s how Singer came up with the numbers:

  • $21 million for alligators, assuming 10 per mile, with a mix of adults ($2,000 each) and hatchlings ($150 each).
  • $40 million for transport of alligators along the border.
  • $683 million for snakes, a mix of water moccasins (for bite) and coral snakes (for visual deterrence).
  • $291 million for feed, in the form of rats. “There is an argument that our new guard force will be able to subsist on the flesh of illegal immigrants,” Singer writes, “but there is no guarantee that we will have the proper distribution of family members of sufficient size and weight (especially problematic are the small children) to sustain the new border system.”
  • $130 million for zookeepers to manage the whole operation.
  • $1.3 billion for medical costs to treat surviving bite victims before they are returned to their countries of origin.

Surprisingly, Singer doesn’t include the cost of digging the moat itself. A separate effort by Jeremy Glass of Thrillist to calculate the cost of constructing a moat (for personal use, oddly enough) came up with an estimate of $1,000 per foot. Applying that number to the 1,954-mile border produces a rough cost of $9.7 billion.

The bottom line: Combine the cost of setting up the Snake and Alligator Border Guard with the cost of digging the moat and you get $12.2 billion, with operating costs of about 10% per year. This suggests that the country could build a snake-and-gator-filled moat for much less than the current wall effort, which has an estimated cost of at least $25 billion.

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