Trump’s ‘Pinky Promise’ on Health Care

Trump’s ‘Pinky Promise’ on Health Care

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Plus, Trump or Biden: Who's better for the economy?
Friday, September 25, 2020

Trump’s ‘Pinky Promise’ on Health Care

The White House and President Trump made some big promises about his speech on health care Thursday afternoon in Charlotte, North Carolina. The White House said Trump would be laying out “his comprehensive health care vision.” The president himself, early in his speech, said his plan “expands affordable insurance options, reduces the cost of prescription drugs, will end surprise medical billing, increases fairness through price transparency, streamlines bureaucracy, accelerates innovation, strongly protects Medicare, and always protects patients with preexisting conditions.”

If you’re reading this or have paid any attention to health policy over the last four years, you know what’s coming next (but keep reading because some of the details might still surprise you and the responses to Trump are worth it). There was, of course, no comprehensive plan. As for vision, to the extent that there was one undergirding Trump’s announcements, seemed to be more about cynical political maneuvering than genuine health care reform.

Trump has long promised to unveil a health care plan that would be less expensive than Obamacare while offering superior coverage. On Thursday, he suggested he had already accomplished those goals, touting an assortment of actions taken or proposed by his administration as his vision, billed as the “America First Healthcare Plan.” (Trump has, for example, pushed for lower drug and hospital prices, increased price transparency and expanded the use of less expensive, short-term plans that critics call “junk insurance” because of their limitations. See this overview of his record for more.)

“Obamacare is no longer Obamacare, as we worked on it and managed it very well,” Trump said. “What we have now is a much better plan. It is no longer Obamacare because we got rid of the worse part of it — the individual mandate.”

But health care experts found Trump’s “plan” sorely lacking in details. “It's not a plan, it's a mirage. It's a series of aspirations with no specific policy proposals to back them up,” tweeted Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, a non-partisan non-profit focused on health.

“The actual policies they announced,” STAT News’s Lev Facher and Nicholas Florko wrote, “are simple, superficial, and non-binding executive orders. Neither will improve the quality of Americans’ health care or lower its cost.”

What Trump did:
The president signed executive orders that appear designed to win over voters — but that experts say are likely to have little impact on American’s actual health care.
Trump’s executive orders pledge to protect Americans with preexisting conditions; promote new rules allowing states to import lower-cost prescription drugs from Canada; and direct the Health and Human Services secretary to push for legislation banning surprise medical bills by the end of the year and pursue administrative action if that effort fails.

Trump also promised to send $200 discount cards to 33 million Medicare beneficiaries, though it’s unclear whether he has the legal authority or the funding to do so.
Here’s a look at some problems and questions surrounding Trump’s orders.

Preexisting conditions:
Trump’s pledge on preexisting conditions carries no legal weight — unlike the protections provided under the Affordable Care Act, which Trump is seeking to invalidate. White House officials reportedly acknowledged that Trump’s protections would not bear the weight of law but were a "defined statement of U.S. policy.” That doesn’t mean much.

“It’s as if I was walking around with a memo that was titled ‘Executive Order,’ and claimed that the policy of the United States is that everybody gets a cheeseburger on Tuesdays,” Nicholas Bagley, a professor at University of Michigan’s law school and Obamacare supporter, told Reuters. Levitt of the Kaiser Family Foundation compared it to a “pinky promise.”

That promise, as ineffectual as it may be, was made necessary by the Trump administration’s support for the ongoing lawsuit seeking to wipe out Obamacare in its entirety.
The executive order “is yet another example of Trump's political gaslighting on the subject,” writes Axios’s Caitlin Owens. “Republicans have never come up with another way to offer the same level of protection the ACA does. If Trump succeeds in stripping the ACA's protections away, people with preexisting conditions would have every reason to worry about their coverage.”

The $200 prescription drug coupons:
 STAT’s Facher and Florko calls this a "political ploy to curry favor with seniors who view drug prices as a priority."

Trump said the discount cards “will be mailed out in coming weeks” but there are plenty of questions that make it unclear whether that will happen, including whether Trump has the authority to do it and where the money might come from.

The White House reportedly said it is getting its authority to send the coupons from a
Medicare demonstration program, with the $6.6 billion cost of the plan covered by savings from Trump’s plan to lower drug prices — a plan that has not yet been implemented. But The Wall Street Journal’s Stephanie Armour reported Friday that, according to an administration official, the proposed funding would come from a Medicare trust fund under the waiver program for testing new initiatives. “These waiver programs have generally been required to show they won’t increase federal spending beyond what would have occurred without the test,” Armour notes.

The bottom line:
Trump’s big health care rollout likely served to highlight what Trump hasn’t done more than what he has. “The speech and executive order stood as a tacit admission that Trump had failed to keep his 2016 promise to replace his predecessor’s signature achievement with a conservative alternative,” The Washington Post’s Toluse Olorunnipa writes. “Unable to repeal the law, Trump appeared open to simply rebranding it.”

Court OKs Lawsuit Over Trump’s Emergency Border Wall Spending

A federal court cleared the way Friday for a lawsuit by House Democrats challenging President Trump’s use of emergency powers to redirect billions in public funds toward border wall construction.

Democrats have accused the White House of violating the Constitution by redirecting more than $6 billion toward the wall following Trump’s declaration of an emergency at the border in early 2019. In a unanimous decision, a three-judge panel on the Court of Appeals for the District of Columbia Circuit partially overturned a lower court’s ruling that found that the House did not have standing to challenge Trump on the issue.

“To put it simply, the Appropriations Clause requires two keys to unlock the Treasury, and the House holds one of those keys,” the senior judge wrote in the 24-page decision. “The Executive Branch has, in a word, snatched the House’s key out of its hands.”

The judges rejected the legal theory put forward by White House lawyers, who argued that Congress needs veto-proof majorities in both houses to challenge the president’s use of public funds. “That turns the constitutional order upside down,” the judge wrote. “The whole purpose of the appropriations clause’s structural protection is to deny the executive ‘an unbounded power over the public purse of the nation,’ and the power to ‘apply all its moneyed resources at his pleasure.’”

Economy Would Do Better Under Biden Than Trump: Moody’s

The economy is widely seen to be a relative strength for President Trump, with voters giving him much higher approval ratings for his handling of economic issues than other areas. But a new analysis from economists Mark Zandi and Bernard Yaros of Moody’s Analytics says that Joe Biden’s economic agenda would spur more growth than Trump’s.

Using an economic model the authors say is similar to those deployed by the Federal Reserve and the Congressional Budget Office, Zandi and Yaros estimated the impact of the candidate’s proposed policies, including changes to the tax code, infrastructure spending and health care access. The strongest growth occurs in a scenario in which Biden is able to pass his agenda through a Congress controlled by his party:

“Largely because of Biden’s substantially more expansive fiscal policies, the economy would return to full employment more quickly coming out of the pandemic than under Trump—in the second half of 2022 under Biden compared with the first half of 2024 under Trump. Biden’s reversal of Trump’s policies on foreign trade and immigration would also contribute to stronger economic growth, so that by the end of their terms in 2024, real GDP would be $960 billion, or 4.5%, larger under Biden than Trump. This translates into 7.4 million more jobs under Biden than Trump.”

However, much depends on whether the election results in divided control of Congress. Zandi and Yaros considered four possible election outcomes, including clean sweeps (full control of the White House and both chambers of Congress by either party) and scenarios that involve divided government (Biden wins but the Senate stays in Republican hands, Trump wins but the House stays in Democratic hands). The strongest economic results are seen in the Democratic clean sweep scenario, which the authors give a 20% chance of occurring.

The other election scenarios result in weaker growth trajectories, and only modest differences overall (see the chart below). The election outcome the authors say is most likely — a Biden win with Republicans maintaining control of the Senate, which they give a 40% chance of happening — produces the second-best economic results over the next decade. Divided control with Trump keeping the White House is the third-best result, while the worst occurs with a Republican clean sweep.

Other notable findings from the analysis:

Biden’s policies favor the middle class:
“Lower- and middle-income households benefit more from Biden’s policies than Trump’s. Biden ramps up government spending on education, healthcare and other social programs, the benefits of which largely go to those in the bottom half of the income distribution. Meanwhile, he meaningfully increases taxes on the well-to-do, financial institutions and businesses to help pay for it.”

While Trump’s favor the rich:
“Trump largely does the reverse. He makes permanent the temporary tax cuts he implemented in his first term. The benefits largely go to higher-income households and businesses, while government spending is scaled back on healthcare and a range of social programs, the benefits of which go mainly to those with lesser incomes and wealth.”

Bigger deficits under Biden:
“Biden’s policies will result in substantially larger federal budget deficits than Trump’s, particularly during their terms as president. Biden’s policies cost $2.5 trillion during his time as president on a static basis, while Trump’s add only a few hundred billion dollars.”

But the economic cost will be low:
“Negative economic fallout from Biden’s larger near-term deficits is mitigated significantly. The reason: With the economy far from full employment and inflation moribund when Biden takes office, the Federal Reserve’s vows on employment and inflation mean it will keep interest rates very low for much of the next presidential term.”

And the debt-to-GDP ratio would be similar after 10 years:
"[T]he stronger economic growth supported by Biden’s policies generates more tax revenue and less government spending. The results are dynamic budget costs of closer to $2 trillion during his term. The stronger growth and increase in GDP also mean that by the end of the decade, Biden’s and Trump’s policies result in a similar 130% publicly traded federal government debt-to-GDP ratio. This compares with 108% when they take office."

Read the report at Moody’s.

Quote of the Week

“The president figured out how to take an overwhelmingly good week and change the subject? Shocking. I don’t know what to say.”

– An unnamed senior Republican senator, as quoted at The Hill, “referring to the dismay Republicans felt over what they see as Trump’s latest unforced error,” namely the president’s refusal to promise a peaceful transition of power if he loses the election in November.

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