Trump Really Does Have a Plan That’s Better Than Obamacare

“If the Supreme Court rules that Obamacare is out,” President Donald Trump said last week, “we’ll have a plan that is far better than Obamacare.”

Democrats couldn’t believe their luck. They still were reeling from special counsel Robert Mueller’s finding that the Trump campaign neither conspired nor coordinated with Russian efforts to interfere in the 2016 elections.

Now the president was changing the subject from collusion (a suddenly awkward topic for Democrats) to health care (which helped them capture dozens of House seats last November).

Besides, the president really doesn’t have a plan that is far better than Obamacare, or any plan at all. Right?

Wrong.

A look at his fiscal year 2020 budget shows that the president has a plan to reduce costs and increase health care choices. His plan would achieve this by redirecting federal premium subsidies and Medicaid expansion money into grants to states. States would be required to use the money to establish consumer-centered programs that make health insurance affordable regardless of income or medical condition.

The president’s proposal is buttressed by a growing body of evidence that relaxing federal regulations and freeing the states to innovate makes health care more affordable for families and small businesses.

Ed Haislmaier and I last year published an analysis of waivers that have so far enabled seven states to significantly reduce individual health insurance premiums. These states fund “invisible high risk pools” and reinsurance arrangements largely by repurposing federal money that would otherwise have been spent on Obamacare premium subsidies, directing them instead to those in greatest medical need.

By financing care for those with the biggest medical bills, these states have substantially reduced premiums for individual policies. Before Maryland obtained its waiver, insurers in the state filed requests for 2019 premium hikes averaging 30 percent. After the federal government approved the waiver, final 2019 premiums averaged 13 percent lower than in 2018—a 43 percent swing.

Best of all, Maryland and the other waiver states have achieved these results without increasing federal spending or creating a new federally funded reinsurance program, as House Speaker Nancy Pelosi, D-Calif., has proposed to do.

State innovation also extends to Medicaid. Some states have sought waivers permitting them to establish work requirements designed to help Medicaid recipients escape poverty.

Arkansas, for example, last June began requiring nondisabled, childless, working-age adults to engage in 80 hours of work activity per month. The program defined “work activity” broadly to include seeking a job, training for work, studying for...

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