WSJ Your Money Briefing - Your Money, Your Vote: Making Healthcare More Affordable

Episode Date: October 6, 2024

In the fourth and final episode of our series “Your Money, Your Vote,” we delve into the presidential candidates' plans to reduce the cost of healthcare. In 2022, U.S. healthcare spending averaged nearly $13,500 per person, and it’s projected to keep rising. We also examine Vice President Kamala Harris’s and former President Donald Trump’s positions on drug prices, the Affordable Care Act and reproductive healthcare. J.R. Whalen hosts. Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Exchanges. The Goldman Sachs podcast featuring exchanges on rates, inflation, and U.S. recession risk. Exchanges on the market impact of AI. For the sharpest analysis on forces driving the markets and the economy, count on exchanges between the leading minds at Goldman Sachs. New episodes every week. Listen now. Here's your Money Briefing for Sunday, October 6th. I'm JR Whalen for The Wall Street Journal. This is the fourth and final installment of our special series, Your Money, Your Vote. Today, we're focusing on how the 2024 presidential candidates

say they'll tackle the rising cost of health care. In 2022, U.S. health care spending reached $4.5 trillion, averaging nearly $13,500 per person, and it's projected to keep rising, according to National Health Expenditures data. Rising costs can make budgeting for care difficult, especially since patients can often be in the dark about the price of their health care treatments ahead of time. People like Jasmine Duran.

She's 28 years old and lives in Arizona. She gave birth to her child a year ago and needed to undergo fertility treatments, leading to some surprise bills. We had to do like all of these other treatments in such a long process that all had co-pays for every single time I came in of like $50, literally every single visit. And I was there on like a weekly basis getting different treatments done. And figuring out what her bill would be at the end of it was tricky. Our total bill for the hospital luckily ended up being $5,000 for me and $3,000 for my daughter.

But again, no idea until after. Nobody could tell me anything until after everything already happened. And I find that incredibly frustrating. And going into November, health care affordability is one of the top issues for voters. So what do the candidates' track records tell us about how they plan to tackle health care costs? And how might their proposals change your insurance coverage or the out-of-pocket cost for your future visits?

To start off, let's break down one of the biggest topics when it comes to the cost of health care, insurance. The Affordable Care Act, commonly referred to as Obamacare, passed in 2010. It granted more than 45 million people some kind of health coverage, according to the Department of Health and Human Services. But some Americans have issues with it and support repealing and replacing the ACA, according to a May 2024 poll from health policy organization KFF. Larry Levitt is the executive vice president for health policy at KFF.

I spoke with him to understand each candidate's approach to health insurance. Larry, how did the Affordable Care Act fare under the Trump administration? Well, there were a lot of twists and turns when it came to the Affordable Care Act under the Trump administration. Day one, Trump as president vowed to repeal the ACA. There was a very contentious and complex effort in Congress to repeal and replace the ACA in 2017, which ultimately failed. Outside of the ACA and those efforts that you mentioned, what were some changes that

Trump made pertaining to health insurance? Much of what Trump did was stopped in the courts, but there were a couple healthcare policies he put in place that were quite bipartisan. One was making healthcare prices more transparent. So hospitals now are required to disclose the prices. They charge patients and then they negotiate with insurance companies. Insurance companies themselves are also now required to make the prices they pay for healthcare transparent. That's got bipartisan support. It's still very complicated. I mean, accessing

these prices is incredibly complex for patients. But the prices are out there for people to see. There was also legislation passed during the Trump administration, which President Trump signed, which prohibited surprise medical bills for consumers. So these are bills. You go to an emergency room. You end up seeing a physician who's out of your network.

Or you go in for outpatient surgery. An anesthesi who's out of your network, or you go in for outpatient surgery and anesthesiologist is out of your network, and you get this surprise bill. Those are now prohibited. Now, as a 2024 candidate, how has Trump approached the topic of health insurance? Trump has also flirted again with trying to repeal and replace the ACA. He said in the debate with Harris that he has the concepts of a plan and that we would see that plan soon. I have concepts of a plan. I'm not president right now. But if we come up with something, I would only change it if we come up with something that's better and less expensive.

And there are concepts... Okay, shifting gears here. What actions do the Biden administration take with regard to health care coverage? So much of what Biden has done on health care was undoing a lot of what Trump did. And that was a whole range of things. It was around short-term insurance plans, which don't have to follow the ACA's rules in covering people with pre-existing conditions. Trump had expanded those plans. Biden reversed that.

Trump had allowed states to impose work requirements on people in Medicaid and Biden reversed that. Trump had dramatically cut outreach under the Affordable Care Act by 90% and Biden reversed that. So many of the early months of the Biden presidency were busy with undoing what Trump had done previously. And what about Vice President Kamala Harris? What role did she play in the actions you discussed in the Biden administration?

Yes, so Vice President Harris has been a leader on some health care issues within the administration. One is certainly reproductive health. She is the most vocal and public advocate for abortion rights. She also has been a leader on issues of medical debt. The Biden-Harris administration has proposed rules to eliminate medical debt from credit reports and that's been a priority that Harris has talked about during the campaign as well. And then with a closely divided Senate, she has often had to cast high-breaking votes in the Senate. And one high-profile one was on the Inflation Reduction Act, which gave the government

the authority for the first time to negotiate drug prices in Medicare. And during the campaign, what plans has she put forth with regard to health insurance and access to it? Harris has doubled down on some of the policy achievements that the Biden administration has had in healthcare. As I've been vice president, and we over the last four years have strengthened the Affordable Care Act, we have allowed for the first time Medicare to negotiate drug prices on behalf of you the American people. She has talked about expanding, accelerating drug price

negotiation in Medicare, applying it to more drugs and applying it faster. The other things the Inflation Reduction Act did were to cap annual drug costs in Medicare, out-of-pocket drug costs at $2,000, and also to cap insulin co-pays at $35 per month. She's proposed expanding that to everyone, not just Medicare beneficiaries. And then she's also talked about extending permanently enhanced premium subsidies

that were enacted in the Affordable Care Act under the Biden-Harris administration. And this is going to be a big health care fight next year, no matter who gets elected, because those subsidies expire at the end of 2025. And people would face big premium increases if the subsidies do expire. Now, you've mentioned some distinct differences between Trump

and Harris. In terms of health insurance and health coverage, are there any areas where the two candidates overlap? Both Harris and Trump have criticized the drug industry for high prices. How that translates into actual policies and whether there'd be agreement there is still unclear, but they've been vocal critics of the drug industry. Drug prices are a significant expense for many Americans.

We'll bring in The Journal's pharmaceuticals reporter Jared Hopkins to dig deeper on that. This is an ad for better help. Welcome to the world. Please read your personal owner's manual thoroughly. In it you'll find simple instructions for how to interact with your fellow human beings and how to find happiness and peace of mind. Thank you and have a nice life! Unfortunately, life doesn't come with an Owner's Manual. That's why there's BetterHelp online therapy. Connect with a credentialed therapist by phone, video, or online chat. Visit betterhelp.com to learn more. That's BetterHELP.com. Both Vice President Kamala Harris and former President Donald Trump are pointing to prescription drug prices as a way to lower health care costs.

My entire career I've worked to hold bad actors accountable and lower the cost of prescription drugs. We're going to deliver lower prices, lower drug costs, new options that will dramatically reduce the crushing burden of American patients. So what action on drug prices could we expect under a Trump or Harris administration? To dive into this, I've brought in my colleague Jared Hopkins. He covers the pharmaceutical industry for the Wall Street Journal. What is the cash flow trail from the moment a drug company puts a price on a product and somebody actually picks the product off the shelf in the drugstore? How much time do you have?

By the time you get to your pharmacy counter and you go get this, there's a number of transactions that have gone on to bring the cost of the drug down to a price that might be five bucks, 20 bucks from maybe $1,000 at the list price. These various parties that are involved are buying and selling the drug essentially before it gets done to the patient. And that includes the insurance company that could include a pharmacy benefit manager. There are wholesalers which sort of move the drug

and ship the drug. And then there's pharmacies. And the pharmacy purchases the drug and gets reimbursed for the drug. A lot of people involved. There's a lot of people involved. There's a lot of people involved, yet it is the average consumer, the average patient, who is often paying more as time goes on.

They're seeing higher out-of-pocket costs. Prescription drug spending is going up in the United States and continues to go up. How much power does the president have in regulating drug pricing? The president has the ability to issue executive orders and that can have a desired effect on drug pricing. For example, President Trump did some executive orders related to drug pricing. One of them was so that drug prices would be the same price in the US as they are in other countries.

It's what's called a sort of most favored nation strategy. President Trump also had something called the rebate rule, which basically drug companies give rebates to pharmacy benefit managers who are the middlemen that manage prescription drug benefits. Those rebates help get drug companies coverage of their prescription drugs. President Trump prohibited that through an executive order. That rebate rule has not gone into effect under the Biden administration. It's been tabled, and the can has been kicked down the road on that. And with regards to the most favored nation,

that never went into effect under the Biden administration. We talked earlier about some other regulations that were put in place under the Biden administration, Medicare negotiating drug prices, capping the cost of insulin. Has Kamala Harris indicated that she would support all of those initiatives, or has she indicated differences in any of them? On one hand, drug pricing hasn't gotten a lot of attention during this campaign.

With regards to the Inflation Reduction Act, she has expressed support for it. And so I don't think that there is an expectation that that would necessarily change. Has former President Donald Trump discussed how he plans to address out-of-pocket expenses for prescription drugs like Biden and Harris have? The Trump campaign and President Trump have not explicitly laid out a drug pricing policy of what to do in a future administration. Drug pricing and health care in general has not really been the topic of discussion on the campaign trail that it was years ago. That was my colleague Jared Hopkins

covering the pharmaceutical industry for the Wall Street Journal. One of the top issues in this election is access to reproductive health care. Kamala Harris is a proponent of protecting abortion access, while Donald Trump has taken credit for overturning Roe v. Wade, saying individual states should set their own rules. But how do the candidates' positions on abortion and other reproductive health issues affect what consumers end up paying? Here's KFF's Larry Levitt. Larry, what are some of the financial repercussions to changes in reproductive health policies?

Larry Levitt, KFF Director, KFF So one has to do with coverage of contraception. Trump succeeded, in fact, in weakening protections under the Affordable Care Act, requiring employers to provide coverage at no cost to patients for contraception. And he created a pretty big loophole allowing employers to be exempt from that requirement if they had a moral objection. When it comes to abortion, Kamala Harris has said she wants to codify into federal law Roe v. Wade. She'll certainly need Democratic votes in Congress to do that and potentially

eliminating the filibuster. It's interesting, if you look at, for example, abortion, the number of abortions has in fact grown nationally since Roe v. Wade was overturned. And that's likely largely due to the fact that medication abortion has become much more available and accessible and in fact lower cost, allowing women to either get it through the mail

or travel. Contraception, I mean the Affordable Care Act required a whole range of preventive services be required by employers and insurers at no cost to patients. So that's wellness visits, it's flu shots, it's contraception as well. And that was one area where Trump tried to weaken that requirement. There's also a legal challenge now making its way through the courts to overturn that requirement to provide preventive services under the Affordable Care Act. Also for low income women, I mean,

the Title X, which is the federal program for family planning, provides a lot of help for low income women, even those without insurance, to access contraception. And the restrictions that the Trump administration had imposed made those less accessible in many cases. Donald Trump made a statement about having IVF, or in vitro fertilization treatments, paid for by the government or insurance companies.

How would that work? There are any number of services that insurance companies are required to cover. In fact, the Affordable Care Act had a list of what are known number of services that insurance companies are required to cover. In fact, the Affordable Care Act had a list of what are known as essential benefits that have to be covered. Everything from maternity care to mental health to preventive services. Mandates for insurance coverage are not unusual. States have done that for many, many years.

What is somewhat unusual in Trump's proposal is the idea that the government would pay for the service if people don't have insurance. That's certainly not a common thing and could potentially be very expensive. Going into November, what questions about the way Americans can expect to pay for health care costs do we still have? There are a lot of big questions, frankly a lot of potential consequences of the November election. I mean, the future of abortion access, the future of premium assistance under the Affordable Care Act, what happens to drug prices in the future, all could hinge on the election in November.

That was Larry Levitt, Executive Vice President for Health Policy at KFF. And that's it for this special series of Your Money Briefing. This episode was produced by Ariana Osborne. I'm your host, JR Whalen. Sound design by Jessica Fenton. Jessica wrote our theme music. Our supervising producer is Melanie Roy. Aisha Al-Muslim was our development producer.

Scott Salloway and Chris Zinsley are our deputy editors. And Falana Patterson is The Wall Street Journal's head of news audio. Thanks for listening.