Trump and rising health care costs debate

Donald J. Trump, the presidential nominee from the Republican Party, raked up the Obamacare issue once again in St.Louis on October 9. He claimed that Obamacare is a complete failure and everybody knows it. It is increasing at a rate which is unprecedented in history- more so for healthcare.

Analysing Obamacare

Since a presidential candidate has spoken against Obamacare, it makes sense to dissect the system and also what he said sentence by sentence. It is an open knowledge that healthcare comes with different kinds of expenses. These vary for individuals, governments and employers. It is also to be noted that such costs do not vary all at once. It must be noted that the spending done by the federal government on Obamacare, or the Affordable Care Act (ACA) as it is formally known, is included in the budget projections.

If one goes by Congressional Budget Office, the official accountant of all such spends, net expense of the law’s insurance coverage provisions, including the tax credits to subsidize the premiums of lower income customers and the expenses for adding individuals to the Medicaid scheme, is lower by 25 percent or $157 billion when compared to the estimate totted up in 2010. The law was enacted that year.

Not as anticipated

The estimated amount was based on the belief that majority of the employers would stop offering their workers the requisite insurance. Instead, the latter would be directed towards the online marketplaces of the law- where the employees would enjoy federal subsidies. This, however, failed to materialize. Spending on Medicaid was actually more than the amount projected. It was also more than compensated by lower spending on the tax credits.

When Trump spoke about rising expenses, he was referring to premium increases in marketplace plans. These are for individuals who does not enjoy coverage provided by the employer and also do not qualify for any public health plan. These marketplaces are used by approximately 18 million Americans. Marketplaces are also known as exchanges.

Trump, during the debate, has noted that as per law, healthcare and health insurance would ratchet up by astronomical numbers, like 68 percent, 71 percent and 59 percent. There were also a number of reports concerning huge increases, like as in Oklahoma, where the premiums in individual market will raise any amount from 58 percent to 96 percent. A number of reasons exist for this scenario. One of them is that insurers charged too low premiums at the beginning and now charge high top even things up.

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