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Donald Trump's 3 Best Ideas to Fix Healthcare in America

By Todd Campbell – Mar 6, 2016 at 6:41AM

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Health insurance tax deductions, changes to health savings accounts, and drug importation are three of the most attractive ideas to improve healthcare costs in America.


Donald Trump unveiled his blueprint for fixing America's healthcare system this week, and while his plan includes ideas such as repealing Obamacare that will undoubtedly be contentious, it also includes these three ideas that most Americans can rally behind.

No. 1: Deducting health insurance premiums
Employers can deduct their share of the cost of employee health insurance, and most employees pay their share with pre-tax dollars, so why can't the average American without employer-sponsored health insurance enjoy a similar benefit at tax time?

Tax deductions lower the amount Americans pay in taxes by reducing taxable income. Therefore, the benefit of the tax deduction will vary depending on taxpayers' income tax rates. Americans would probably prefer a tax credit instead of a tax deduction, because tax credits reduce Americans' final tax bill dollar-for-dollar. For example, Marco Rubio's healthcare reform plan includes an advanceable and refundable tax credit that individuals could use to pay for health insurance.

Regardless, a tax deduction for monthly insurance premiums could save individuals participating in the health insurance market money and that's a good thing.

No. 2: Improving the value of HSAs
Health savings accounts (HSAs) allow Americans to contribute pre-tax dollars into an account that can be used to pay for out-of-pocket medical costs, such as co-pays. These accounts are used in combination with high-deductible insurance plans that often carry lower monthly premium payments, and money that's contributed to them can be rolled over from year to year.

Currently, if you don't designate a spouse as a beneficiary on your HSA, then any money left over in your HSA can be taxed when you die. Trump's plan would allow HSA accounts to pass along to heirs penalty-free, and that's an attractive idea, especially for older or sicker patients who may fear that the money they've put in their HSAs will be wasted.

No. 3: Allowing for the importation of drugs from other countries
In America, Medicare can't negotiate for lower prices directly with drugmakers and insurers must negotiate prices with drugmakers individually. As a result, Americans can pay far more for their medicine than people living in other countries. For example, prices for a medicine in Canada can be less than half the price charged for the same drug in the United States.

Currently, laws prohibit the importation of prescription drugs unless regulators give it an OK. Some states have passed laws that help with drug importation, but generally, importing drugs from other nations is illegal.

Under Trump, a system for importing drugs would be created that helps consumers import medicine from markets such as Canada. Conceivably, this system would also help patients vet imported medicine to ensure it's as safe and effective as the same medicine sold in America.

Donald Trump's drug importation plan, however, won't help everyone. Because America is a large and highly profitable market for drugmakers, medicine is often launched in the U.S. first, and therefore, new medicines or complex specialty medicines may not be available for import for months or even years after they've become available in America. For that reason, Trump's plan will have the biggest impact on costs associated drugs that have been on the market for a while. 

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