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Trump Calls for Letting Americans Deduct Health Premiums, Import Drugs

Mary Caffrey
The Republican frontrunner's plan did not say how some of its proposals would be paid for in the federal budget, and parts of it were at odds were previous statements in support of requiring coverage for pre-existing conditions.
Republican frontrunner Donald Trump released a series of healthcare proposals late Wednesday that could prove highly popular with consumers, if not the powerful interest groups that may look to fight them. The plan had few specifics, particulary how the many tax breaks Trump calls for would be funded. Its populist appeal is sure to cause discussion as the presidential contest heads toward Florida, where price sensitive seniors vote March 15, 2016.

Tax breaks and the ACA

To make healthcare affordable, Trump topped the list with a proposal to “allow Americans to fully deduct health insurance premium payments from their tax returns under the current tax system.” While the idea was offered so that “no one slips through the cracks,” there was no explanation of how this would be funded in the federal budget. This proposal comes at a time of increased cost-sharing in healthcare.

In exchange, Trump repeated his call to “completely repeal Obamacare,” and singled out the Affordable Care Act’s (ACA) individual mandate for special scorn.

However, in the past Trump has signaled support for not allowing insurers to deny coverage for those with pre-existing conditions, so it is unclear how this would be addressed. He also makes no mention of a popular ACA mandate that allows young adults to stay on parents’ plans through age 26. Most experts believe that no matter what the fate of Obamacare, this piece will remain.

Repealing the ACA and offering tax breaks to ensure healthcare affordability would eliminate the reporting requirements that have come with the law, according to Dave Fried, president of TriCore, a Robbinsville, New Jersey-based firm that provides payroll, human resources, and health care benefits management services for employers in multiple states. Fried has also been Robbinsville’s mayor for more than a decade and is involved in health benefits for the town’s union and non-union workers. A Republican, Fried has not endorsed any candidate in 2016 presidential contest.

“The ACA has cost a small fortune in reporting, and it’s a tremendous amount of work for employers. We even have to report on employees who don’t work for us,” Fried said in an interview with The American Journal of Managed Care. “This causes more work and more costs, and doesn’t actually provide any coverage.”

In his opinion, the combined proposal including the tax deduction would encourage employers to contribute more to health savings accounts (HSAs, see below) or provide more funding for healthcare.

Importing drugs

Trump said he wanted to “remove the barriers to entry into free markets for drug providers that offer safe, reliable, and cheaper products.” Any proposal for importing drugs will be fiercely opposed by the pharmaceutical industry and its allies in Congress—and could create even more headaches for his new ally, New Jersey Governor Chris Christie, whose state is home to several leading drug manufacturers.

But a Trump health plan with ideas for controlling drug prices is not a surprise, since he has been on record saying that “the drug companies” are the reason that Medicare has not been able to negotiate discounts on the order seen in the Veterans Administration. As a reader of polls, Trump is no doubt aware that the Kaiser Family Foundation and others have found that lopsided majorities of consumers across the political spectrum find high drug prices to be a major problem, and that the drug companies are at fault.

On Friday, a spokeswoman for the Pharmaceutical Research and Manufacturers Association (PhRMA), said importing drugs that had not passed muster with FDA could pose a threat to patient safety. "Under both Democratic and Republican administrations, the FDA has stated it cannot assure the safety of imported medicines from foreign countries and they would present a risk to public health," said PhRMA's Holly Campbell. "The competitive biopharmaceutical marketplace for medicines in the United States works to control costs and encourages the development of new treatments and cures for patients."

Campbell said that low-cost generic drugs comprise 90% of the drugs prescribed to Americans, typically at lower prices than drugs from overseas. However, a widely read report just released by AARP found that for seniors, at least, brand name drugs account for most expenditures (64.1%), even though generics account for more actual prescriptions (69.4%). 

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