As president, Hillary Clinton and Donald Trump would take the nation down distinctly different paths on health care. In this post, we summarize the health reform proposals of each candidate, and—drawing on new estimates by Christine Eibner and colleagues at RAND Health—compare the proposals’ implications for the total number of people with insurance coverage, people’s out-of-pocket health care costs, and the federal budget.
RAND’s analysis is based on publicly available health care proposals on the candidates’ websites. Where these proposals lacked sufficient clarity for modeling, RAND sought additional information from the campaigns. When answers were not forthcoming, or did not fully resolve questions, RAND made reasonable assumptions that were reviewed and critiqued by independent experts. RAND modeled only those proposals for which it had adequate detail and technical capacity.
The Starting Point
As a starting point, Clinton and Trump propose dramatically different approaches to the Affordable Care Act (ACA): Clinton would maintain the ACA and Trump would repeal it. In estimating the impact of Trump’s proposal, RAND assumes a full repeal of the law including insurance subsidies, expanded eligibility for Medicaid, and individual market reforms such as bans against preexisting condition exclusions. RAND also assumes that repeal would eliminate the ACA’s financing mechanisms such as its Medicare payment reforms and taxes on health plans and medical devices. Consequently, RAND estimates that compared to maintaining the ACA as is, repeal would cause nearly 20 million people to lose their insurance in 2018, increase average premium and out-of-pocket costs for people who buy insurance on their own, and increase the federal deficit. Trump’s repeal of the ACA would increase the federal deficit because the loss of savings from the law’s Medicare reforms and revenues from fees and taxes would be greater than savings from the elimination of insurance subsidies and the Medicaid expansion.
Exhibit 1 shows the implications of maintaining the ACA or repealing it, prior to any enhancements or replacements.
Exhibit 1
| Clinton: Maintain ACA | Trump: Repeal ACA | |
| 2018 Coverage: | 251.6 million people insured | 231.9 million people insured (19.7 million fewer covered) |
| Average out-of-pocket costs in individual market: | $3,200 | $4,700 |
| Effect on Deficit | $0 | +$33.1 billion |
ACA Enhancements and Replacements
Starting from this baseline, each candidate offers a set of health care proposals. Given where each candidate begins (maintain vs. repeal the ACA), Hillary Clinton’s proposals might be best described as enhancements to the ACA and Donald Trump’s as replacements for the ACA. And both candidates address recent health system issues such as rising costs for prescription drugs. Our digital comparison feature provides the details.
What Are the Potential Effects of the Candidates’ Proposals?
For both Clinton and Trump, RAND modeled the potential effects of maintaining vs. repealing the ACA, as well as those proposals for which they had both sufficient detail and technical capacity. The estimated effects of Clinton’s ACA enhancements are calculated based on maintaining the ACA, whereas the effects of Trump’s replacement proposals are combined with repeal of the ACA.
For Clinton, RAND estimated the effects of four proposals that are aimed at lowering people’s out-of-pocket costs for insurance premiums and health care services:
- Refundable tax credit of up to $2,500 for individuals or $5,000 for families with private insurance who have premiums and out-of-pocket costs for health services that are more than 5 percent of income.
- Effect on coverage: + 9.6 million people
- Effect on out-of-pocket costs: Drops for insured across income distribution, with those with low and moderate incomes seeing largest savings
- Net effect on deficit: + $90.4 billion
- Increase premium tax credits for people with marketplace plans so that eligible enrollees pay no more than 8.5 percent of their income, down from current 9.66 percent under the ACA.
- Effect on coverage: +1.7 million people
- Effect on out-of-pocket costs: Drops for people receiving tax credits
- Net effect on deficit: + $3.5 billion
- Fix the ACA “family coverage glitch” by pegging unaffordable coverage in employer plans to family policies rather than single policies, with the affordable threshold set at 8.5 percent of income. This policy is modeled in combination with the increase in premium tax credits.
- Effect on coverage: + 2.8 million people
- Effect on out-of-pocket costs: Drops for eligible families
- Net effect on deficit: + $10 billion
- Add government-administered public insurance option in all state marketplaces.
- Effect on coverage: + 400,000 people
- Effect on out-of-pocket costs: Drops for marketplace enrollees with moderate incomes
- Net effect on deficit from baseline: - $0.7 billion
For Trump, RAND estimated the effects of repeal combined with proposals that are aimed at replacing the insurance coverage provisions of the ACA as well as changes to the Medicaid program:
- Make all premium payments for plans purchased in the individual market tax deductible.
- Provide states with block grants to finance their Medicaid programs.
- Effect on coverage: - 25.1 million people
- Average out-of-pocket costs in the individual market: $4,700 (no change from repeal)
- Net effect on deficit: + $0.5 billion
- Permit the sale of insurance across states lines.
- Effect on coverage: - 17.5 million people
- Average out-of-pocket costs in the individual market: $5,700; cost are lower for younger and/or healthier, higher for older and/or less healthy
- Net effect on deficit: + $33.7 billion
In summary, Hillary Clinton’s health care proposals would maintain and extend existing affordable insurance coverage, providing insurance to millions more people than would Donald Trump’s proposals. Clinton’s proposals also lower consumers’ out-of-pocket spending on average. Trump’s ACA repeal and replacement options would make insurance coverage in the individual market more expensive on average, with some proposals resulting in low- and moderate-income families paying more than higher-income people. In contrast, Clinton’s proposals maintain the progressivity of the ACA insurance expansions—lower-income people would pay less for coverage than higher income people—while providing some savings to people across the income spectrum.
When looking at the impact on the federal budget, One of Trump’s replacement options, tax deductions for individual market insurance, would further increase the deficit since it represents a loss of tax revenue. Converting Medicaid to block grants, however, would nearly fully offset the deficit increase triggered by his repeal of the law, since it reduces federal Medicaid spending.
Three of Clinton’s proposals would increase the federal deficit, with the largest increase associated with tax credits for people with high out-of-pocket costs. She has proposed paying for this expenditure with rebates from drug manufacturers and taxes on higher-income families. Clinton’s proposal to offer a public insurance plan in state marketplaces would lead to a slight decrease in the federal deficit. Greater competition generated by the public plan, and the lower cost of the public plan itself, would reduce marketplace premiums and thus federal spending on premium tax credits.
Other Provisions
As our digital comparison feature shows, the proposals modeled by RAND are a subset of those offered by the candidates. For example, both candidates are concerned about the rise of prescription drug costs, and both propose allowing people to buy drugs from abroad and encouraging greater competition in the pharmaceutical industry. Clinton proposes additional options such as a cap on prescription drug out-of-pocket costs for consumers.
Both candidates also emphasize improving the quality of health care and the performance of the health system. Each would like to see more transparency from doctors and hospitals about the prices they charge for their services. Clinton proposes dedicating more resources to ensuring that people in poor neighborhoods and rural areas have access to primary care services. And she wants greater integration of mental health services and physical health care.
Hillary Clinton also offers a number of new proposals to provide help for families caring for older relatives or family members with Alzheimer’s disease, as well as people with drug or alcohol addiction.
As the election moves into its final phase this fall, The Commonwealth Fund and RAND will provide updates to this analysis if the candidates revise their health proposals.
Notes
1 The tax deduction results in 4.1 million fewer people losing coverage when combined with a repeal of the ACA.
2 RAND provided average out-of-pocket cost estimates for Trump’s proposals since they are primarily for insurance purchased in the individual market. Because most of Clinton’s proposals affected people with any private coverage, RAND provided estimates of out-of-pocket costs only by income level due to the complexity of the effects given existing subsidies and employer contributions.