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This story is the first in a series that looks at how the presidential candidates could shape your family’s finances.
Kitchen table issues are front and center for many Americans as voting continues in presidential caucuses and primaries across the country.
Will their insurance premiums keep rising? Can they manage to save a few hundred dollars for emergencies when so much of their pay goes toward rent? Will they be able to send their kids to college?
Among those money worries, one of the biggest is health care costs, with doctor visits, hospital stays and prescriptions typically topping the list of a family’s biggest expenses.
In 2017, the average American family spent $8,200 on health care, according to the Kaiser Family Foundation. Nearly $3,000 of that amount went towards premiums, while more than $2,000 covered other out-of-pocket costs.
The Affordable Care Act “did do a lot to make it possible for people to get coverage, and the uninsured rate has gone down,” says Cynthia Cox, a vice president of the Kaiser Family Foundation. “But there are still plenty of people who have insurance and find it unaffordable. So health care costs are holding many families back.”
Here’s where President Donald Trump and the Democratic front runners in the race for president stand on health care.
Elizabeth Warren health care plan: Medicare for All
Sen. Elizabeth Warren of Massachusetts has a calculator on her campaign website where visitors can plug in information to find out how her Medicare for All plan would affect their family finances.
A family of four, with health coverage through a parent’s employer, would save $12,378 in health care spending under Warren’s plan. That’s the amount the average family paid for premiums and other out-of-pocket costs in 2019 but would no longer have to pay because Warren’s proposal gets rid of those charges.
Warren also claims that the middle class will not have to pay more in taxes.
Bernie Sanders’ health care plan
Sen. Bernie Sanders of Vermont also wants a Medicare for All, single-payer national program that would eliminate premiums, deductibles and co-payments.
He says out-of-pocket costs for prescribed medicines would be capped at $200 a year. And he would get rid of the $81 billion in past-due medical debt currently carried by 79 million Americans.
But to pay for Medicare for All, taxes would have to rise, at least for some.
“The question is, whose taxes increase?” Cox asks. “It’s likely that higher-income, healthy people will pay more than they do now. Lower-income, sicker people will pay less.”
Warren’s plan, projected to cost $20.5 trillion in additional federal revenue between 2020 and 2029, would impose new taxes on the 1% of Americans with the highest incomes. That would amount to $3 trillion in federal funds.
Additionally, the federal government would take in roughly $1.4 trillion from families who owe taxes on the extra income they take home because they’re no longer responsible for paying premiums or needing to sock away money in tax-advantaged health savings accounts.
Evelyn Zohlen, a certified financial planner in Huntington Beach, California, says her clients typically make $150,000 or more and live in one of the most expensive areas of the country. She doesn’t expect that they’ll get much financial relief from the current proposals.
“Which family of four are we talking about and how much is their insurance covering?” she says, in regard to Warren’s plan. “Is it the entire family? Dependents? Is it a high deductible plan?… Maybe the family comes out a little bit better, but at the end of the day, if they’re paying more in taxes, it’s not nearly as appealing.’’
Biden, Buttigieg, Klobachar, Bloomberg on the Affordable Care Act
Plans proposed by candidates like former Vice President Joe Biden; Pete Buttigieg, the former mayor of South Bend, Indiana; Senator Amy Klobachar of Minnesota and former New York City mayor Mike Bloomberg, bolster the Affordable Care Act and would mostly benefit the 5% to 7% of Americans who buy their own coverage, Cox says.
People who receive insurance through their employers, particularly those who are lower-income, could also benefit from a more robust public option.
Biden’s site says “no family buying insurance on the individual marketplace, regardless of income, will have to spend more than 8.5% of their income on health insurance.”
That means a family of four earning $110,000 annually, is projected to save $750 a month, “cutting their premiums almost in half,” his site says.
Bloomberg would also shore up the Affordable Care Act, increasing subsidies so that premiums don’t exceed 8.5% of a recipient’s household earnings.
And Buttigieg would enable those who receive insurance through the Affordable Care Act’s marketplaces to get better coverage at a lower price.
“The 60-year-old in Iowa making $50,000 and currently paying $12,000 annually in premiums will now pay no more than $4,250 annually for gold coverage,” his site says.
End to surprise billing
Like many of his rivals, Buttigieg would also end surprise billing, a change that could save families hundreds, even thousands of dollars.
Roughly one in five emergency room visits can result in a surprise bill because a doctor is outside of a patient’s insurance network, or the patient is charged for lab work and other services, Cox says.
In most cases, the bill is a couple of hundred dollars. But in a few instances, the costs have been in the tens or hundreds of thousands of dollars.
While those higher amounts are rare, “even a couple of hundred dollars that’s unexpected can be a real strain for some people,” Cox says.
Trump seeking to end Obamacare
The Trump administration, meanwhile, supports a lawsuit, Texas v. Azar, that is trying to overturn the Affordable Care Act. That could take a heavy toll on families, Cox says.
“If the lawsuit is successful …that would have broad effects on many people’s health care and costs,” Cox says, adding that it would be particularly hard on those who lose coverage they obtained through Medicaid expansion, as well as those with pre-existing conditions who might not be able to afford or enroll in a new plan.
“Even those of us with employer coverage could be affected… by having lifetime caps added to our coverage or having higher out-of-pocket expenses,” she says.
Other steps Trump’s taken, like expanding short-term, limited coverage plans, might lower premiums for those who are healthy, but make “coverage less accessible and less comprehensive for sicker people,” Cox says.
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