Among the many head-scratching comments made by President Trump in his interview with the New York Times on Wednesday, a remark about the ideal price of health insurance was perhaps the most baffling.
“Once you get something, it’s awfully tough to take it away,” Trump said to the Times’s Maggie Haberman about coverage for preexisting conditions, a key part of the Affordable Care Act (a.k.a. Obamacare).
“That’s been the thing for four years,” she replied. “When you win an entitlement, you can’t take it back.”
“But what it does, Maggie, it means it gets tougher and tougher,” Trump said.
As they get something, it gets tougher. Because politically, you can’t give it away. So preexisting conditions are a tough deal. Because you are basically saying from the moment the insurance, you’re 21 years old, you start working and you’re paying $12 a year for insurance, and by the time you’re 70, you get a nice plan. Here’s something where you walk up and say, “I want my insurance.” It’s a very tough deal, but it is something that we’re doing a good job of.
Let’s set aside, for now, that “$12 a year” insurance. Let’s instead first parse what Trump is talking about.
We can get a hint from a comment he made in May to The Economist.
[W]e’re putting in $8bn [to a high-risk coverage pool] and you’re going to have absolute coverage. You’re going to have absolute guaranteed coverage. You’re going to have it if you’re a person going in … don’t forget, this was not supposed to be the way insurance works. Insurance is, you’re 20 years old, you just graduated from college, and you start paying $15 a month for the rest of your life and by the time you’re 70, and you really need it, you’re still paying the same amount and that’s really insurance.
The part that’s in bold gives us a sense of where he’s going.
Trump is arguing, it seems, that an insurance system is supposed to be based on people paying in over a lengthy period of time so that, when they need coverage, they’ve already helped offset the costs. He thinks of it, in other words, a bit like life insurance, or Social Security.
His point, it appears, is that a system where people suddenly have the need for new coverage or coverage that’s expensive from the outset “was not supposed to be the way insurance works.” That’s not really true, of course; for someone born with a heart condition, for example, there was no halcyon period in their 20s when they could pay into the system without needing more back in coverage.
That’s how health insurance differs from life insurance. Instead of one person paying against his own future needs, it’s a pool of people paying in against their collective future needs. So if you have insurance coverage now while you’re healthy, you’re helping to pay for that young kid with the heart condition — or someone who, in Trump’s formulation, “walks up” and demands insurance.
Trump’s comment about this not being how insurance works actually undercuts the comment he’d made a few sentences before in that Economist interview, and an argument he presented to Republican senators on Wednesday.
The point of Obamacare was to increase the number of healthy people paying into insurance pools so that coverage for those with preexisting conditions could be expanded. An insurance program that only covers the very sick would either have to limit coverage or have expensive policies. A program that has healthier people paying in can help keep costs down for those who need it. Healthy people don’t always want to buy insurance, though, which is why Obamacare has a mandate: have insurance or pay a tax penalty.
Trump’s right: Setting aside a few billion dollars of government money to help cover the costs of those with preexisting conditions in lieu of expanding the pool of participants is not the way it’s supposed to work. But he also doesn’t like the individual mandate, telling those senators that “[p]remiums are so high that 6.5 million Americans chose to pay a fine to the IRS instead of buying insurance, the famous mandate.” The GOP bill, he pledged, would “repeal the individual mandate,” which he hailed as a good thing.
Which doesn’t make much sense, given his $12/$15-a-year argument. If the ideal system in his eyes is one in which people pay in over the course of their lives, you’re either going to have to mandate that a young person have that coverage or hope that somehow, magically, they’ll decide to do so on their own, despite not being ill. That’s why you end up needing a pool of $8 billion to (partially) offset the difference.
Oh, also, health insurance costs a smidgen more than $1 a month. Maybe it would ideally by that inexpensive, and Trump’s making a tacit argument about dramatically gutting the costs of medical care. Or maybe he’s proposing a massive investment on the part of government that can absorb nearly all of the cost of coverage for all Americans. Sen. Bernie Sanders would be thrilled.
Or maybe he’s seen too many commercials on cable news channels about having life insurance for less than the price of a cup of coffee a day.