Trump Doesn’t Know the Difference Between Health Insurance and Life Insurance


healthinsDonald Trump needs go back to school when it comes to understanding health insurance. (Photo: Chris Potter)

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The New York Times fact-checked an interview three reporters from the paper conducted with Donald Trump last Wednesday. The president was in error on several occasions, stating what his aide Kellyanne Conway has called “alternative facts.” Perhaps the most astonishing revelation was that Trump appeared not to know the difference between life insurance and health insurance. This is staggering ignorance for a president, not to mention one who is leading the battle against the Affordable Care Act.

The Congressional Budget Office estimates that at least 20 million people will lose health coverage in any of the proposed Republican “repeal and replace” bills. So many lives are on the line, and the president of the United States thinks that health insurance works like life insurance.

The New York Times explained Trump’s egregious misunderstanding of health insurance as revealed in the interview:

“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,” Mr. Trump said. “Here’s something where you walk up and say, ‘I want my insurance.'”

Mr. Trump’s description aligns with life insurance or Social Security more accurately than health insurance. A 21-year-old who took out a whole life insurance policy, for example, would pay premiums until death, and the amount accumulated over the decades would be paid out to beneficiaries.

A 21-year-old who purchases a health insurance policy is not paying premiums to save up for care 50 years down the line.

How could Trump possibly understand Obamacare and the viability of its health insurance exchanges? As economist Dean Baker wrote on Truthout yesterday,

There is a really important point that often gets left out of the picture: the exchanges are not dying. In fact, according to experts who study this issue and aren’t on Donald Trump’s payroll, the exchanges are actually doing quite well.

The assessment of the Congressional Budget Office, the Kaiser Family Foundation and others is that the health care exchanges had largely stabilized and insurers were now able operate profitably. In other words, the people who don’t have something to gain by lying about the health of Obamacare say that the program is actually working….

Through these and other mechanisms President Trump certainly is capable of killing Obamacare. But let’s not play games here, Trump is not talking about letting the patient die. He is talking about murder. Trump and the Republicans are not discussing whether they should let Obamacare die. They are plotting to kill it.

Healthcare executives are also enjoying “sky-high” salaries and benefits, according to Axios:

The CEOs of 70 of the largest U.S. health care companies cumulatively have earned $9.8 billion in the seven years since the Affordable Care Act was passed, and their earnings have grown faster than most Americans’ during that time, according to an Axios analysis of federal financial documents.

Why it matters: The ACA has not hurt the health care industry. Stock prices have boomed, and CEOs took home nearly 11% more money on average every year since 2010 — far outstripping the wage growth of nearly all Americans. But the analysis also reveals that the pay packages for the country’s influential health care executives don’t give them incentives to control health care spending — something that economists, policymakers and even Warren Buffett have said is the most pressing problem in health care.

In an email sent out today by the Courage Campaign, a California-based advocacy organization, Sen. Kamala Harris (D-California) wrote,

Republican leadership in the Senate is so desperate to pass their “health care” bill that they’re cutting obscene backroom deals and rushing a revised bill, which no one has seen, to the floor this week — all in a craven attempt to steal health insurance away from millions of Americans so they can give their wealthy donors a tax break.

The shift in taxes to benefit the wealthy is a key goal of the House and Senate bills to replace the Affordable Care Act. As Dr. Jessica Schorr Saxe asks today in an op-ed in The Charlotte Observer,

What do you call a bill that provides hundreds of billions of dollars in tax cuts to the wealthy – by taking health care away from other Americans?

It should be called a tax cut bill for the rich, disguised as the “Better Care Reconciliation Act” (BCRA), which has nothing to do with providing care.

An NPR article in May concluded that the House-passed Obamacare restructuring bill would largely benefit the rich:

The health care bill passed by the House on Thursday is a win for the wealthy, in terms of taxes.

While the Affordable Care Act raised taxes on the rich to subsidize health insurance for the poor, the repeal-and-replace bill passed by House Republicans would redistribute hundreds of billions of dollars in the opposite direction. It would deliver a sizable tax cut to the rich, while reducing government subsidies for Medicaid recipients and those buying coverage on the individual market.

It is this tax cut for the wealthy that most interests Trump and the Republicans who are pushing for the replacement of Obamacare. That Trump fundamentally misunderstands how health insurance is funded and how it works is stunning. However, if you speculate that it is tax reduction for the richest individuals in the United States that motivates him, one can understand why he need not be bothered with acquiring the most basic knowledge of health insurance. It’s no surprise then that according to Americans for Tax Fairness, an organization advocating for more equitable taxation, under the latest Senate GOP healthcare insurance bill, Trump himself would receive “a personal tax cut … of between $1.4 million and $2.8 million a year.”

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