Trump commits to reducing healthcare costs

1. The subsidies function as a tax credit
2. There is a “coverage gap” for the poorest
3. There is no such thing as “free healthcare.” There is always a cost
4. Universal access should be a primary goal

A few months ago, the White House announced an initiative that would extend subsidies to help Americans pay for their health insurance under the law known as ObamaCare for two more years. The Great Healthcare Plan requires any healthcare provider or insurer that accepts Medicare or Medicaid to post their prices and rates in their facility and ensure that insurance companies comply with price transparency requirements.

In an interview with this correspondent by Tony Feijoó, CEO of New Health Partners, at their headquarters in Miami, this health expert recently urged citizens to call on their representatives in Congress to demand that the subsidies under the Affordable Care Act (ACA) be maintained and adjusted to the new situation. “Despite the political complexity, the human value and lives saved must be emphasized, a factor that is often lost in purely financial debates about spending and abuse of the system.” Subsidies are crucial to the affordability of insurance. It is clear that if the subsidies had expired, health insurance premiums would have increased dramatically, making them difficult for citizens to afford.

In the US, Tony Feijoó explains to this correspondent, if the patient is low-income, the Medicare program allows them to receive free social services, and retirees have optional coverage. The subsidies extended during the COVID pandemic expanded income eligibility from 400% to 600% of the poverty level, allowing an additional 3.6 million people to purchase insurance. If these subsidies had not been extended, Tony Feijoó estimates that between 4 and 5 million people would not have been able to pay for their insurance plan as of January 1.

We remind readers that the ObamaCare Act seeks to provide health coverage to more than 30 million Americans who do not have health insurance. This is achieved through subsidies, the expansion of Medicaid, and the fact that citizens know that most adults must maintain their health insurance.

The U.S. healthcare system relies heavily on Obamacare subsidies to ensure affordability, and their elimination would have left millions of people uninsured. Although the U.S. system is primarily private and employment-based, with successful public programs such as Medicare and Medicaid, its high costs are due more to public health issues than to the model itself. The ideal solution proposed involves ensuring universal access through fairer income contributions and maintaining a private insurance system, while urging citizen action to protect current subsidies and prioritize human value over purely financial considerations.

The subsidies function as a tax credit

According to Feijoó, to make them legally viable, subsidies were structured as a tax credit against federal taxes. The money is taken from the U.S. Treasury and given to insurers on behalf of the consumer. However, eligibility is strictly tied to income levels, leaving out those who earn above or below the established thresholds.

There is a “coverage gap” for the poorest

The ObamaCare law provided that people below 138% of the poverty level would be covered by Medicaid. However, the expansion of Medicaid was not mandatory for states. In states that did not adopt it, people earning below 100% of the poverty level do not qualify for ObamaCare subsidies (which require a minimum income) or Medicaid, leaving them without affordable options.

There is no such thing as “free healthcare.” There is always a cost

For Tony Feijoó, the term ‘free’ is misleading. Someone always pays, either through higher taxes or other means. In the U.S., it is estimated that offering a universal “free” system would require a very significant tax increase. Furthermore, it is argued that the private sector has efficiently managed healthcare in the country. The problem of high costs in the U.S. is not attributed to the system being private, but to public health issues such as obesity, diabetes, and hypertension, which are lifestyle-related. The only way to reduce costs in the long term is to focus on prevention and healthy habits, such as annual checkups and diet.

Universal access should be a primary goal

The most important improvement would be to ensure that everyone in the US has access to healthcare, regardless of income. This could be achieved by having citizens contribute a lower and fairer percentage of their income (e.g., 2-3% instead of the current 9.65% under ObamaCare) to a system with private insurance. One negative aspect of the current system is that the price of insurance determines the breadth of the network of doctors and hospitals to which one has access. More expensive insurance offers more options, while cheaper insurance limits access, creating inequality.