Biden and Trump Want Lower Health Care Costs, but Approaches Differ

Access to affordable health care remains a high priority for voters across the U.S. In a January survey of 1,011 adults by Politico and the Harvard T.H. Chan School of Public Health, roughly 80 percent ranked "taking steps to lower the cost of health care" as extremely or very important. Of that group, 89 percent were Democrats and 76 percent were Republicans.

President Donald Trump, a Republican, and Joe Biden, the Democratic presidential nominee, have made managing health care costs among their top domestic priorities. While they both favor steps to make health care more affordable, however, their approaches differ. Here is a look at key policy steps they've proposed and how those actions might affect employer-sponsored health coverage.

Biden's Health Care Proposals

Biden advocates the following health care policies:

Allowing ACA plans to compete with employer coverage

Biden favors maintaining and expanding coverage under the Affordable Care Act (ACA), and he would keep the employer mandate that requires organizations with 50 or more full-time or equivalent employees to provide ACA-compliant health care to their full-time workers—and to comply with the ACA's employer tracking and reporting requirements.

During his acceptance speech for the Democratic presidential nomination, Biden said: "We can and we will rebuild our economy. And when we do, we'll not only build it back, we'll build it back better … with a health care system that lowers premiums, deductibles and drug prices by building on the Affordable Care Act."

Biden also would allow employees to receive coverage on an ACA exchange even if their employer offers ACA-compliant coverage, although details about eligibility for government subsidies have not been provided.

Currently, if an employer offers health plans that meet the ACA's requirements for affordability and minimum quality standards, then employees are not eligible for subsidized coverage through an ACA exchange, regardless of their income.

"The Biden plan will help middle-class families by eliminating the 400 percent income cap on tax credit eligibility and lowering the limit on the cost of coverage from 9.86 percent of income to 8.5 percent," Biden's campaign website states. "This means that no family buying insurance on the individual marketplace, regardless of income, will have to spend more than 8.5 percent of their income on health insurance."

The website further explains, "If a family is covered by their employer but can get a better deal with the 8.5 percent premium cap, they can switch to a plan on the individual marketplace, too."

Providing a 'public option'

The crux of Biden's health plan, however, is his support for a public insurance option similar to Medicare. According to his campaign website, "Whether you're covered through your employer, buying your insurance on your own, or going without coverage altogether, the Biden plan will give you the choice to purchase a public health insurance option like Medicare."

A campaign fact sheet explained further: "If you have coverage from your employer but it is inadequate … Joe would give you the ability to choose a new Medicare-like public option, with the federal government providing enhanced premium subsidies."

As with Medicare, the public option Biden supports would cover primary care without co-payments. Biden's website says, "It will bring relief to small businesses struggling to afford coverage for their employees"—presumably by allowing them to stop offering coverage.

As a government-run health insurance plan available on the ACA’s marketplace exchanges, the public option would compete directly with other qualified health plans.

According to the Hoover Institution, a conservative think tank, "widespread enrollment would pose significant challenges to private insurers," which would be competing against a federally subsidized alternative. The liberal Brookings Institution noted that a public option might "enable private insurers to negotiate better rates with providers, reducing premiums for private plans as well."

Lowering the Medicare-eligible age to 60

Biden proposes allowing Americans ages 60 to 64 to enroll in Medicare. In April, he wrote, "Under this concept, Americans would have access, if they choose, to Medicare when they turn 60, instead of when they turn 65. … This would make Medicare available to a set of Americans who work hard and retire before they turn 65, or who would prefer to leave their employer plans, the public option, or other plans they access through the Affordable Care Act before they retire."

Researchers have found that "the strong link between health insurance and employment in the United States may cause workers to delay retirement until they become eligible for Medicare at age 65," suggesting that earlier access to Medicare could prompt more employees to retire sooner.

Implications for Employer Coverage

"The employer-based system is the largest provider of coverage in the U.S., which provides health benefits to more than 181 million Americans and their families," explained Chatrane Birbal, vice president of public policy at the Society for Human Resource Management (SHRM).

Despite new options that might lure some employees away from employer-sponsored health benefits, "it would be a hard sell for people with employer coverage to give that up and move to another alternative," said Steve Wojcik, vice president for public policy at the nonprofit Business Group on Health, which represents large employers. He noted that workplace health care plans are often generously subsidized by employers, and employees tend to look favorably on their employer-sponsored coverage options.

"Many of these proposals have not been fleshed out, so we don't know, at the end of the day, how much [employees] would benefit" by moving to a government-run or subsidized option, Wojcik said.

According to SHRM's 2019 Employee Benefits survey of 2,763 HR specialists, most employers offer two or more types of health care plans to employees, and 83 percent of employers share the cost of health insurance premiums with employees.

"SHRM supports lowering costs for employees and employers and believes that any approach to health care reform in the U.S. must preserve the option for employers to provide health insurance," Birbal said.

Trump's Health Care Proposals

Trump advocates the following health care policies:

Allowing options to the ACA

The Trump administration opposes the ACA, favored repeal attempts when Republicans controlled Congress, and supports a court challenge—to be heard next term by the U.S. Supreme Court—over whether the ACA became unconstitutional when Congress removed penalties requiring individuals to have coverage. However, legal analysts think that the court is not likely to strike down the law.

During his acceptance speech for the Republican presidential nomination, Trump said: "We will protect Medicare and Social Security. We will always, and very strongly, protect patients with pre-existing conditions, and that is a pledge from the entire Republican Party. We will end surprise medical billing, require price transparency, and further reduce the cost of prescription drugs and health insurance premiums." Unlike in his 2016 acceptance speech, however, he did not call for repealing the ACA.

Trump has touted his administration's incremental moves to expand choice and lower the cost of health insurance. His administration has, for instance:

• Allowed employers, as an alternative to providing group coverage, to use health reimbursement arrangements to reimburse employees who buy coverage on ACA exchanges.
  

• Extended the coverage period of non-ACA, short-term health plans to up to three years. These plans provide less coverge than ACA-compliant plans but have lower premiums. The Obama administration had reduced the length of short-term, limited-duration insurance plans to just three months.
  

The administration also issued regulations to allow associations to provide group health coverage for multiple employers, although those rules are currently being litigated.

Promoting price transparency and telehealth

Trump promises to do more to create a competitive market for health care service by continuing regulatory efforts to require hospitals and health care providers to be transparent about pricing. He supported and signed into law legislation banning "gag clauses" that prevented pharmacists from telling customers about less-expensive drug options and when it would cost less to purchase a medication outright rather than through their health insurance.

The Trump administration supported expanded use of telemedicine by easing regulations that barred providing telehealth across state lines and pledges to continue these efforts.

Ending 'Surprise' Out-of-Network Billing

Both Trump and Biden support efforts to stop "surprise billing" by out-of-network health care providers as a way to lower consumer health care spending. Surprise billing occurs when patients are billed by an out-of-network provider they reasonably assumed was in their health plan's network.

On May 9, Trump asked Congress to prohibit doctors and hospitals from excessively billing patients for the balance not covered by their insurance for emergency treatment at an out-of-network facility or by an out-of-network doctor at an in-network facility.

"This must end," Trump said in remarks posted online by the White House. "We're going to hold insurance companies and hospitals accountable."

According to Biden's campaign website, "The Biden plan will bar health care providers from charging patients out-of-network rates when the patient doesn't have control over which provider the patient sees (for example, during a hospitalization)."

Study results recently reported by the American Journal of Managed Care showed that "[m]ore than 10 percent of health plan spending is attributable to ancillary and emergency services that commonly surprise-bill."

Lowering Prescription Drug Costs

The candidates' views on prescription drug prices overlap in some areas, according to a comparison by the nonprofit Kaiser Family Foundation. Many of Trump's and Biden's proposals focus on limiting rising drug prices for Medicare enrollees. For instance, Biden supports authorizing the federal government to negotiate drug prices for Medicare, while Trump wants drug manufacturers' rebates passed along to consumers in privately administered Medicare Part D prescription drug plans rather than claimed by pharmacy benefit managers or health plans.

Both Biden and Trump favor capping consumers' out-of-pocket drug costs in Medicare Part D plans.

On Sept. 13, Trump signed an executive order directing the secretary of the Department of Health and Human Services (HHS) to investigate requiring Medicare Part B, which covers outpatient care, to pay the same price for prescription drugs as other developed nations pay for the same drugs.

Biden proposed that an independent review board established by the HHS assess the value of newly launched specialty drugs, using prices in other countries as reference. This price would apply to Medicare, Biden's public-option plan and private plans that participate in the individual marketplace.

Biden and Trump both support allowing consumers to import drugs from foreign countries, subject to safeguards.

Payment Arrangements Overlooked

"Both Democratic and Republican proposals focus on coverage," Wojcik said, "and don't get at the real issue," which is fee-for-service payment arrangements that create "misaligned incentives" and drive up the volume of care, whether the care is necessary or not.

Wojcik favors policies that would help employers contract with health care providers for a "global," or all-services, payment and would promote an integrated team approach in which care is coordinated among providers with "incentives to keep people well and to engage patients in their own well-being."

Related SHRM Articles:

How the Supreme Court Could Rule on the Affordable Care Act, SHRM Online, September 2020

Where Kamala Harris Stands on Workers' Pay and Benefits, SHRM Online, August 2020