Fact or Fiction? Scrutinizing Trump and Clinton on Obamacare

By Todd Campbell and Kristine HarjesMarketsFool.com

During the second presidential debate last Sunday, Donald Trump and Hillary Clinton offered up starkly contrasting views regarding Obamacare's effectiveness and its future. Do the candidates claims regarding the Affordable Care Act pass muster with fact-checkers?

In this episode ofThe Motley Fool's Industry Focus: Healthcarepodcast, healthcare analyst Kristine Harjes and contributor Todd Campbell explain what the candidates said during the debate, why they said it, and whether their contentionsare true or false.

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A full transcript follows the video.

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This podcast was recorded on Oct. 12, 2016.

Kristine Harjes: Welcome to Industry Focus, the podcast the dives into a different sector of the stock market every day. It'sOctober 12th, Wednesday, and I'm your Healthcare show host, Kristine Harjes.I have Todd Campbell, one of The Motley Fool's healthcare writers,on the line. Todd, welcome to the show!

Todd Campbell: Thanks, Kristine!It's great to be here.

Harjes: On the heelsof the presidential debate this past Sunday night, we wanted to do a little fact-checkingaround some of the healthcare-related statements that were made. As I always feel obligated to mentionwhenever we discuss anything even close topolitical on the show, The Motley Fool is not a partisan organization. Todd and I are going to do our bestto provide a fair and honest review of candidates and their statements. With that being said,let's dive right in. Thefirst thing we wanted to talk about wassome of the statements that were maderegarding the cost of health insurance. Specifically, Donald Trumpclaimed in the debate thathealth insurance is going up by numbersthat are astronomical,68%,59%,71%. Todd, is that true?

Campbell: Well,before I answer that question, I have a question for you.

Harjes: OK, let's hear it.

Campbell: Little bit oftrivia here to start off the show --what do you think had higher viewership? The debate or theSunday night football game with the Packers?

Harjes: Just one game versus the debate?

Campbell: Yep, the debatehead-to-head against the Sunday night football game. Which do you think people watched more?

Harjes: Probably the football game.

Campbell: You'd be wrong!

Harjes: Good!I think that's a good thing.

Campbell: It was the big game on Sunday night,by a pretty astronomical number. Do you want to hazard a guess as to how many millions of people tuned in to watch the debate, Kristine?

Harjes: I'm not even going to guess, because I've already been wrong once.(laughs)

Campbell: (laughs) Maybe ourlisteners at home have some ideas. I'll give you a secondto come up with it. I'll give you a hint -- it'smore than 50 millionand less than 100 million...it's 69 million people tuned into the debate. Toput that in perspective, 16.6 million tuned in to watch the Packers'Sunday night football game. So,obviously, everybody is tuning in. They want to have some ideaof what these candidates' plans are forvarious policies. We're a healthcare-oriented show, so we're going to stick to the healthcare side of things. Fortunately,we did get some insight into both of these candidates'positions in the debate. As you mentioned,one of the first statements that was madein the debate was Trump'sassertion that premiums are rising byfairly dramatic numbers,68%, 59%,71%. Those are big increases.

Doing a little bit of fact-checking on this,there are some communities and specific plans within some communities wherepremiums are increasing by levels that are high,in the double digits. But those are very rare.Kaiser Family Foundation went through and did an analysis in Julyand they found that the average planis going up by about 9%. Of course,that's far southof the numbers that Trump wasmentioning. But there are some areaswhere premiums are increasing for specificplans. For example, in Nashville, Tennessee,increases are about 25%in 2017, versus 2016. So, while he is saying there's a really large increase,it's not really across the whole nation. It's for specific communities that are seeing large increases. So, that's where we come down on that.

Harjes: So,this is really a question of scalewhen it comes down to it. When you're talking aboutone specific circumstance, it is far more likely that you can getsome sort of astronomical number, as opposed to when you look at the averagein an area, and even more so when you lookat the average nationwide.

Campbell: Yeah,and there's another observation herewe have to remember. Although premiums are increasing, we also have to remember that the absolute out-of-pocket cost --if you're at home and you have an Obamacare plan, don't start panicking. If you receive subsidies, the subsidies are adjusted. Most people who get Obamacarereceive subsidies.

Harjes: Right, 82%.

Campbell: Yeah, 82%. Andmost people who get subsidies pay less than $100 a month for their insurance, whichI think most people will agree is a pretty low priceto pay for their healthcare insurance.

Harjes: Andthe subsidies get adjusted for these price increases, too.

Campbell: Andthe subsidies get adjusted upwardbased upon the cost of the plans. So, premiums are heading higher,but those higher premiums, the brunt is really borne by those people who --like myself -- participate in the Obamacareexchanges but don't qualify for the subsidies.

Harjes: There'salso another dilemmagoing on here. It's something that we've talked about on the show before. There'sthis issue between health insurers being sounprofitable on these exchanges that they're dropping out,possibly leading to lower competition, whichyou could imply would mean even higher prices, versus the other side of that coin --the insurerscould hike pricesto make themselves profitable.

Campbell: Right, Kristine. Atthe heart of the matter, what Trump is really saying is thatpremiums are rising rapidly, and that's a big problem. There'sevidence, and we've talked about it on the show previously, that insurers have notadequately priced their plans to turn a profit.United Healthcare (NYSE: UNH), as you were alluding to, hasalready said that they're going to go fromproviding health insurance in a couple dozen states to just a handful of statesin 2017,because they're losing hundreds of millions of dollarson the plans that they offered this year.

Harjes: So,when we look at this statement as a wholemade byTrump,it's true that numbers are going up. Whether or notthere are individual cases of 68%, 59%, 71%, that's entirely possible. I would say the statement, as a whole, istrue but needs context. Is that fair?

Campbell: I think that's pretty fair.

Harjes: On the same lines of insurance,Hillary Clinton also weighed in with a claim that we're at90% health insurance coverage, which is the highest that we've ever been. To give this one a little bit of contextwithin the debate itself,this was part of her claim that she wants to getcoverage to 100%,have the costs go down, and the quality go up.

Campbell: Right.I think the question is,are we really at 90% insured? Theanswer to that question is yes, we are. I think a lot of times, when we think about Obamacare, we only think about the marketplaces. And while the marketplaces are an important part of Obamacare,we have to realize that the Affordable Care Actincluded a lot of other things,including an expansion of Medicaid in over 30 states. If you couple together all of the provisionsassociated with the Affordable Care Act,we end up with a population where91.4% of Americans arecovered by health insurance. So, less than 10%right now are going without.

Harjes: Exactly. Getting to 100%definitely won't be easy. I'm not even convinced that it's possible. But to stick to the facts here, we have22 million people that are uninsured. A big thing to realize about this population is thatone third of them are ages 19 to 34. This has been a sticking point for Obamacare --it's really difficult to get younger,healthier people to sign up for health insurance,despite the fact that the penalty for not doing so is increasing.

Campbell: Right. The22 million number is actually after we removeillegal immigrants. It's controversial. There's been some discussionover whether or not there should beallowed to buy Obamacare plansin the system, since we're paying for their healthcare coverageindirectly through businessto the emergency rooms and that type of thing. We'll leave that for another day, who knows? You're right, this is going to be tough. This last 10% is going to be tough. You have the young invincibles whomaybe aren't fully employed ordon't really see the value in preparing for that accident or illness that comes out of nowhere. It'sgoing to be hard to convince them.

You have poor populations, too, thatsimply don't have access to the technology or the resources, thatdon't fully understand the program. It's going to be hard to reach out to them as well. So,getting the last 10% will be tough. Then, of course,depending onwho wins the election, we have no idea if we'll go toward 100% orless than 100%,because we have two very different outlooks onwhat the future should be regarding Obamacare between these two candidates.

Harjes: Along those lines,one of the other things that came upin the debate was claimed by Trump thatHillary Clinton wants to go to a single-payer system. Before discussing whether or not that's true, can you give us a little bit of context on what that even means?

Campbell: There wasa lot of debate during the primarybetween Bernie Sanders and Hillary Clintonon the value or the concept of a Medicare-for-all, wherebasically you would eliminate the system as it stands today and you open up Medicareso that everyone can participate in Medicare,rather than just people who are over 65. Bernie Sanders advocatedfor Medicare-for-all. Hillary Clinton did not. But she didconcede over the course of the primaryto start thinking about possibly expandingMedicare to include more people, perhaps people who are in their 50s, or areas,for example, where insurers like United Healthcare haveexited, and maybe there's only one choice, or there are no choices in the Obamacare exchanges,perhaps providing people with an option where they can buy into Medicareregardless of their age that way.

Harjes: Greatexplanation. Thanks, Todd! You also answered the question of whether or not this claim is true. Clinton to has indeed never endorseda Medicare-for-all system.

Campbell: Yeah, she actually came out earlierin the year and saidit's just not something we can dogiven how vested we are in our current system. It would be too hard to do. So, she has been advocating forchanging Obamacare,making it better, recognizing that it has faultsand making some tweaks and adjustments along the way. That, of course, is in stark contrast to Trump,who has said that he favors a full repeal of Obamacare and starting from scratch with an entirely new system.

Harjes: One ofthe big things that he doesn't like about Obamacare is the cost. He stated in the debatethat Obamacare is going to beone of the biggest line items in the federal budget very shortly. This is an interesting one. According to the Committee for a Responsible Federal Budget, theAffordable Care Act is actually beneath Social Security, Medicare, defense, interests, and non-AC-related Medicaid. It'sprojected to remain below these line items through 2026.

Campbell: Yeah. Again,I think this is one of those "true with context"situations. No one would deny that theAffordable Care Act is an expensive program. It's costly. By the CBO's estimates,we're talking about costs eclipsing $1 trillionsometime in the middle of next decade, which is certainly not chump change. As it stands now, however,I guess it depends on how you say"one of the most expensive line items." I don't know where you cut that off. But, yes, these other programs are more expensive than theAffordable Care Act. The Affordable Care Act, however, is not a cheapprogram. Again, it goes back to that debate of how important is healthcare to America in a political sense?

Harjes: It'sworth noting that providing care to the uninsuredis costly in its own ways.

Campbell: Correct.

Harjes: One last -- well, not even one of the last. Another claim we want totalk about today --Trump claims that Canadians come into the United States for big operations because theirsingle-payer system is broken. This came right afterthe claim that Hillary wants to go to a single-payer system,and it was one of his ways of describing why a single-payer systemwill not work. It is true thatCanadians do come into the United States for care,at times. The Fraser Institute reports that52,000 Canadianscame into the United States in 2015 for care. Normally, this was because of the wait times for non-life threateningprocedures. This is becoming a trend in this show --context is necessary. Fifty-two thousand people out of the Canadian population of 35 million is actually just 0.1%. To give even more context to that, the CDCestimated that 750,000United States residents travelabroad for their care every year. That is 0.2%, so a roughdouble of the Canadian population. Here, this is normally becauseit can be less expensive to traveloverseas for your healthcare.

Campbell: Right. Theargument here is, "Ourhealthcare is so good as it standstoday that it attracts other people to come here and get their care." Theother side of that is,if it was 100% true,we probably wouldn't havesuch a large number of Americans traveling elsewhere to get care, too. If it's not life threatening, emergency care,and it's something expensive like cosmetic surgery, dentistry,heart surgery, that can maybe allow you to travel, people are going to shop for the best deal,and sometimes that will mean crossing the border from Canada to the U.S.,and sometimes that will mean crossing the border from the U.S. to Canada.

I always look at healthcare as a whole. It's kind of a rating of saying, "What'sthe life expectancy of the nation?" Ifyou have a higher life expectancy, your healthcare system is probably doing a pretty good job. The U.S. has a high life expectancy, 70.5 years oldor something like that. That's pretty darn good. But it's also not in the top 5. It's not in the top 10. It's not in the top 15. It's not the top 25. It's actually 31st in the world. So, we can definitely be doing things better. We do have a good system,but we could be doing things better.

Harjes: One of the other claimswe wanted to discuss today was,going back to Hillary Clinton, she claims that 8 million kidsevery year have health insurance because of actions that she took. Is this a true statement?

Campbell: Yeah,I'm going to give her the benefit of the doubt on this, becausealthough she wasn't in Congress, so she couldn't submit the bill, Ted Kennedy did, to establish the Children's Health Insurance Program. Kennedy has saidthat it wouldn't have happened without her efforts.

Harjes: This was in 1997, whenClinton was the first lady.

Campbell: Correct. We have 8.4 million children now covered by CHIP. So, yeah, we'll say her role waspretty significant in helping make sure that insurance increased for about 8 million children. Yep.

Harjes: Shealso claims to have made medicine safer for kids byrequiring dosing to be more carefully done. Though she didn't name an act -- and I don't think she named the Children's Health Insurance Program, either,by its actual name --this claim was referring to the Pediatric Research Equity Act. This wasactually another true statement.

Campbell: Right, which you could argue is a prettyimportant thing, because you don't want to be giving the same dose to an adult as you would to a child,necessarily, unless you knew it was safe.

Harjes: Right. Those are all the true/falsestatements that I have in mind, Todd. Did I miss anything?

Campbell: I've got a couple more. I'm not sure how much time we have, but we'll go through it. One of the bigassertions by Trump is thatthe removing of the artificial boundaries that prohibit insurers fromcompeting against state lines wouldprovide a significant cost savings topeople going out and hunting for premiums. I think that wasan interesting comment by him. I think he said,for President Obama, by keeping these boundary linesaround each state,and it was almost done until just toward the endof the passage of Obamacare,and he went off from thereto talk about thearchitect of Obamacareand the like. But again, what he's talking about is these lines thatprohibit selling insurance claims across state lines. And, yes, those lines exist. States govern insuranceindividually,so they regulate it on an individual basis.

However, there's considerable debateover whether or not allowing a plan inArizona to be sold to someone in New Hampshire would actually work,because there's a lot that goes into these plans. You have to establishsystems, networks of doctors and hospitals. If you have a plan and Arizona, someone in New Hampshire is not going to be flying to Arizona for their care. So,there are a lot of reasons why thisstrategy might not work out quite the way as some intend.

Harjes: Thisseems like it might be a little bit more difficultof a statement to put a true/false label on. Have there beenany studies looking into this?

Campbell: I think what's important forpeople to remember isthe idea of tearing down these artificial bordersis not new. It's been discussed for a long time. There was a study doneback in 2012 that evaluated a number of states that tried to launch pilot programs that wouldallow for cross-border selling of insurance. Georgia, Kentucky, Maine, Rhode Island, and a couple others participated. And, unfortunately, not one insurertook them up on the offer.

Harjes: Interesting. At this point, we arerunning out of time. Before we sign off, I want to reiterate something thatcame up quite a few times throughout this discussion today --all of these statements need context. It's very easy to take a single line from a debate or a campaign speech or anadvertisement and touted as asingular statement and try to drawimplications from it, but there's always more to the story. Like we tell you with stocks,do your homework, do your research,look in and try to understand the bigger picture. That is the best way that you could possibly go about truly understanding howeach of these candidates truly feels aboutthe United States healthcare system.

Todd, thank you so much for all of yourcontributions today and always.As always, people on the program may have interests in the stocks that they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell any stocks based solely on what you hear. For Todd Campbell, I'm Kristine Harjes. Thanks so much for listening and Fool on!

Kristine Harjes has no position in any stocks mentioned. Todd Campbell has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.