Make no mistake about it: The policies of President-elect Donald Trump, Rep. Tom Price, his nominee for secretary of health and human services, and House Speaker Paul Ryan will, if implemented, lead to a health-care catastrophe.
We don’t yet know the details, but from their public statements, and from the reform bill Mr. Price repeatedly introduced in the House, we have a pretty good idea of what they plan to do. The resulting crisis would place an enormous burden on the public and charitable entities that make up the medical safety net and place a concomitant obligation on the foundations that support them. It’s an obligation they must start working to meet now.
What will happen if the new administration and Congressional leaders enact their plans?
Millions of people currently insured under the Affordable Care Act will lose their coverage. They will instead be offered the opportunity to set aside pretax money in a health savings account. That money can be withdrawn and used to pay medical bills when necessary. The government will allow tax credits of up to $3,000 year (a laughably low amount) to cover all of their medical costs — premiums, deductibles, co-payments, medications, and the like.
There are so many problems with this idea that it’s hard to know where to begin. To take just two: If the cost of your medical care eats up the money in your health savings account, you’re on your own, at least until you reach the out-of-pocket limit, which could be many thousands of dollars. You could avoid this by forgoing medical treatment for all but the most serious problems — but seemingly minor health issues can fester until they become major ones that are far more costly to treat.
Millions of poor people currently covered by Medicaid will find themselves without health insurance. Under the new plan, the federal government will no longer pay 90 percent of the cost of insuring additional people under Medicaid. Rather, it will turn Medicaid over to the states, giving them some money in the form of block grants.
Will this be a lot of money, or a little? One doesn’t have to be clairvoyant to foresee that a Congress hostile to entitlements is unlikely to err on the high side.
Following Mr. Ryan’s lead, Mr. Price plans to turn Medicare into a “voucher” program. The federal government will give seniors money to buy health coverage on the open market. The amount of the voucher is unlikely to reach the cost of treating the expensive conditions that plague older people. When it’s exhausted, you’re out of luck.
Moreover, the Price plan makes it easier for physicians to opt out of Medicare and charge what they want. Not only will you have to dig much deeper into your pocket to pay for care, you’ll be lucky to find a doctor willing to provide it.
The Trump-Price-Ryan plans will exacerbate the divide between rich and poor. Wealthy people will be relatively unaffected. They will be able to tap into “concierge medicine,” wherein patients who pay annual fees or retainers can get direct access and enhanced attention from a primary-care physician. Those with fewer resources will be forced to use the safety-net system of federally funded health clinics, free clinics, public hospitals, and emergency rooms (which, by law, have an obligation to provide medical care only until the condition that brought a patient there is stabilized).
It is not clear which of the proposed changes will become law. There are already suggestions from the incoming administration that some modifications should be postponed until 2018 or later. Nonetheless, we should take the president-elect and key government officials at their word and assume they will try to enact what they propose. We should also consider what their policies would mean for foundations.
Reforms that eliminate coverage for millions of people and leave millions more with insurance policies that do not cover the cost of their care will put tremendous stress on the safety-net system. Grant makers are likely to feel a responsibility to shore up these institutions, as many have done in the past and are currently doing.
The reality is that even the combined resources of the country’s more than 100,000 foundations cannot begin to cover the number of people who will need care. But they can take steps to meet the coming crisis, and they should not take a wait-and-see approach.
First, the nation’s foundations — including those not devoted to health — should get together to map a common response. They should consider providing some level of core support to organizations that can effectively advocate on health-care issues and lobby against the draconian changes likely to be proposed at both the federal and state levels. And they should agree on a limited number of strategies, among them, to:
- strengthen safety-net institutions’ capacity to deliver services to increasing numbers of patients;
- provide policy makers and opinion leaders with information about what works and what doesn’t; and
- support the monitoring of and reporting on the effect of changes in health care on people’s access to care, their out-of-pocket costs, and the quality of the care they receive.
This last strategy would be especially powerful if policy makers understood in advance that the impact of their decisions would be actively monitored and reported and if they knew that the data would be broken out by demographic status and congressional district. The effect of these new policies on all Americans must clearly be seen.
It would be a terrible shame if foundations wait until there is a full-blown crisis before acting. Given the high priority that the incoming administration and congressional leaders have placed on health care, they are likely to move quickly on their proposals. Grant makers must act with urgency if they are to play more than a rear-guard role.
This will be a challenge for many foundations, which are not accustomed to responding in real time to a crisis of this magnitude. But if ever there was a time for America’s foundations to step up, this is it. Failure to do so could well have lasting and devastating consequences, especially for the most vulnerable among us.
Stephen Isaacs is a lawyer and former Columbia University professor of public health. Paul Jellinek is a former vice president of the Robert Wood Johnson Foundation. They co-founded Isaacs/Jellinek, a consulting firm that advises foundations.
