Posted on 11/29/2016 11:43:36 AM PST by SeekAndFind
By tapping House Budget Committee Chairman Rep. Tom Price to serve as his Secretary of Health and Human Services, President-elect Trump has added to his team one of the most serious and knowledgeable Republicans on healthcare policy, and in the process pressed his finger on the scales of the internal GOP debate over how specifically to replace Obamacare.
In contrast to many Republicans, who have talked in terms of repealing Obamacare without offering their own vision for the healthcare system, Price, an orthopedic surgeon, has for years been refining his own detailed plan. In fact, he was one of the few Republicans who introduced an alternative bill in 2009, during the actual debate over Obamacare. You can read that version of the "Empowering Patients First Act" in its entirety here.
Given that Trump offered scant details on healthcare during the campaign, Price could have outsized influence on the incoming president's health policy. Price happens to also be close with House Speaker Paul Ryan, who he succeeded as chair of the Budget Committee. Both of the men have similar attitudes on health policy, including overhauling Medicare and Medicaid. During an interview I did with Price for my 2015 book "Overcoming Obamacare," we discussed his basic philosophical approach to replacing the law.
Two things should stand out to those trying to understand the thinking of the next HHS Secretary (assuming Senate confirmation).
Price told me unequivocally that reforming the system has to start with fully repealing Obamacare: "It needs to be fully repealed, because the first step out of the gate for Obamacare is a step in the wrong direction and that is for government control over every aspect of health care, so it's hard to fix the system that they have put in place without ending that premise that government ought to be running and controlling health care."
At the same time, in contrast to some conservatives, Price told me, "Coverage is important, and our bill, the 'Empowering Patients First Act,' we believe provides not just an incentive, but the financial feasibility for every single American to purchase the coverage that they want." He added that "the system doesn't work if people aren't covered."
When it comes to healthcare policy, those on the right have been engaged in a long struggle, which my book detailed, on how to reverse Obamacare. The spectrum of opinion has ranged from a desire to fully uproot Obamacare and fundamentally reject its emphasis on expanding coverage (rather than merely reducing costs) to a preference to reforming it more modestly and perhaps maintain certain provisions. Price falls somewhere in the middle of that spectrum (one also occupied by his ally Ryan). That is, he wants to fully repeal it, but he also thinks it's important to consider policies that would provide broad coverage.
The biggest demonstration of this is Price's preference for offering tax credits to individuals to purchase insurance rather than simple tax deductions. Though it seems like an esoteric argument, it's actually pretty fundamental to understanding the differences on the right on health policy.
Many conservatives prefer offering tax deductions to individuals because they function more like a tax cut – that is, people's tax liabilities are reduced by the amount that they spend toward coverage. However, anybody who supports this view has to be prepared to accept the fact that it will benefit a more limited number of people, because many Americans with low incomes pay little or no income taxes against which to deduct.
Providing individuals with tax credits of a specific amount, regardless of how much they pay in taxes, would benefit that lower-income population. Of course, it comes with a higher cost, as tax credits function more like spending, which is what gave other conservatives pause. Former Louisiana Gov. Bobby Jindal, who was also floated as a potential HHS pick, called tax credit-based plans "Obamacare Lite." Whether Trump realizes it or not, by tapping Price, he is providing a boost to the Price school over others.
"Credits are a challenge for some folks on my side of the aisle, and I understand that," Price told me when I pressed him on the disagreement among conservatives. "But the problem I have right now is that we are imprisoned by a system that doesn't provide high-quality care for many individuals in our society, especially at the lower end of the economic spectrum, because of the rules that have been put in place by the federal government. So, if we freed up the patients to select the kind of coverage that they want, we would get a model and a system that actually worked for them and not for government."
I wrote about the most recent version of Price's plan in detail when it came out last year, but here's how it would basically work.
It would repeal the text of Obamacare, and replace it with a system that would provide tax credits to individuals based on age. Though previous versions had varied the credits based on income, doing so by age is easier to administer (HHS won't get into the problems it's had with Obamacare in terms of verifying income for the purposes of the subsidies) and it also provides more money to those who have to pay more for insurance. In addition, there would be a one-time tax credit to put in a health savings account for routine medical expenses.
Unlike previous incarnations of GOP reform proposals, the plan only modestly meddles with the tax bias in favor of employer insurance, and also encourages small businesses to band together to purchase insurance through trade associations and allows for the sale of insurance across state lines. He also calls for providing grants to states to cover those with pre-existing conditions (one way Trump may square his promises to repeal Obamacare while offering something to those with such illnesses).
Price's plan was very similar to the House Republican plan promoted by Ryan, and as Budget Committee chair, Price embraced Ryan's proposals to block grant Medicaid to states and transition Medicare to a system where seniors would use subsidies to choose among competing private plans. During the campaign, Trump was an opponent of significant entitlement reform, but along with Ryan, an HHS secretary Price would be another voice in his ear arguing in favor of a major overhaul.
All of these grand plans, of course, are just ideas until they grapple with political realities. But given what a blank slate Trump is on healthcare policy, the Price choice would give us the best indication yet of where the administration may be heading.
If the government is providing vouchers then how are they out of it?
I disagree with your take on it.
Obamacare was headed to single provider, no competition.
Trump’s new plans will cause policies to proliferate, enhanced competition.
Where there is business to be had, insurance companies will flood the market to get ‘their share’.
There’s no government guarantee that there will be a hardware story in every city in the U.S. None the less, there is one just about everywhere.
Failure is not built into this plan. It gives people more choices, encourages competition, and gets government out of the decision making business.
Insurance companies will offer policies that cover a variety of things. People will weigh the policies and pick the one that is best for them.
That is the private enterprise at work. And the idea that a tax cut that comes with it is a bad idea, is the first time I’ve heard Conservatives trash tax cuts.
If my employer pays the premiums for my life insurance policy, I have to report the premium as taxable income. But if my employer pays for my medical insurance, there is no tax consideration for me. This is just one reason why life insurance premiums are lower today than they were 25 years ago, but medical insurance premiums were getting increasingly unaffordable even before Obamacare was passed.
Any “health care reform” that fails to recognize the inherent fatal flaw of a system that is built on the expectation of third-party payments for services that provide personal benefit is doomed to fail.
“Insurance companies will offer policies that cover a variety of things. People will weigh the policies and pick the one that is best for them.”
“That is the private enterprise at work.”
Yes, that’s the right path to take.
“gives people more choices”
Yes
“gets government out of the decision making business”
Yes
How?
Where there is business to be had, insurance companies will flood the market to get ‘their share’.
But only if they can make enough profit.
There’s no government guarantee that there will be a hardware story in every city in the U.S. None the less, there is one just about everywhere.
There are pharmacies on every corner, hospitals in every city, doctors by the score, all in place today. Why does government need to get involved?
Failure is not built into this plan. It gives people more choices, encourages competition, and gets government out of the decision making business.
Sure it is. The government subsidies may not be enough to pay for the insurance. Insurance premiums could continue to skyrocket. Companies could choose to end their insurance and place their employees into the government program in numbers higher than anticipated. People could choose not to participate. States may choose not to fund high-risk pools. The list of perils and pitfalls is very long, and any one of them could derail any slim chance the program has for success.
Insurance companies will offer policies that cover a variety of things. People will weigh the policies and pick the one that is best for them.
That's what they said about Obamacare.
And the idea that a tax cut that comes with it is a bad idea, is the first time I’ve heard Conservatives trash tax cuts.
This is not a tax cut. It's a tax credit, which means that if you don't pay income tax due to other deductions you still get the money. It is a government subsidy. It is a reduction in government revenue and an increase in government spending that would need to be offset somehow. And the plan is silent on how to do the.
1. Open up competition ACROSS STATE LINES. As long as a health care plan meets a states requirements, it shouldn't matter if the plan is sold and/or administered out of state or not.
2. Pre-Existing Conditions must be covered. Period. Whether or not that means creating high risk pools for affected individuals or not I don't know. It's just unacceptable that those with pre-existing conditions no matter how minor are excluded from coverage and that has to stop.
Thanks Brian.
I think you're right.
Letting the free market handle it sounds good but we're miles from a situation where the market can work effectively.
Functioning markets require knowledgeable actors and the more transparency the more efficient the market.
We've built a system seemingly designed to keep the users ignorant of the real costs and to obscure as much as possible of the inner working of the system.
The third-party payer problem is huge, with no one but the insurance company and maybe the medical practitioner knowing the cost of any procedure in advance.
Add to that the large number of people who's insurance is heavily subsidized by their employer so they don't even know the true cost of their own coverage and you effectively hide the information users need to make the rational decisions that make markets work.
We've been on this path for almost a century and are totally pregnant. We will need to make incredibly fundamental, wrenching changes to how we do health insurance before free markets have a chance.
2. If an insurance company must cover a pre-existing condition, then it's not really insurance.
Item #2 can be addressed through high risk pools as you said, or through an idea I've considered for some time where insurance carriers would be obligated to share risks for "pre-existing conditions" as defined by their own policies. In other words ... Suppose I have insurance through Company A and I have a serious medical condition, then my employer moves to Company B. Company B should not be forced to cover every expense associated with my "pre-existing condition," but Company A should still be on the hook for part of my expenses through a re-insurance market of some kind. I would think this sort of thing can easily be worked out in state regulations.
For later.
Right now in most states there is an approved list of insurance companies that can participate. Others can’t just jump in. Also, an insurance company in New Jersey can’t simply decide to do business in California, and open up shop there.
Trump wants to eliminate these restrictions. Any insurance company should be able to offer services in all 50 states. When you have 250 companies vying for your business, it’s far better than one or even ten.
Trump’s new plans will cause policies to proliferate, enhanced competition. He explained this for months on end, and it’s true.
Some will opt out, but with an abundance of insurance companies, others will pick up the slack.
Government is getting out of the business. Instead of Obamacare, there will be health care. Private people buying private policies. That’s what we want.
Government providing an tax deduction incentive could be termed a government subsidy, but it’s actually a way for you to purchase your medical care for less money. You decide how to spend your money. The government doesn’t. Isn’t that what we’ve always said we wanted?
May not be..., that’s what you wish to rest your objection on? You mean that you would rather pay 100% of your health insurance without a tax deduction? Okay, well, just refuse to take the deduction. No problem.
There will be no government program. I do expect there to be a program for folk who are uninsured now, but we were already paying for them. Medicaid was being used to cover folks. Finding a way for the government to cover them cheaper seems like a win/win to me.
What would be the incentive for businesses to discontinue providing insurance with rates falling due to more competition? Believe me, if companies are still providing insurance at this point, they’ll continue. The upward pressure under Trump will be much less.
I’m sure there will be some problematic areas that will have to be worked out. That being said, the goal is to get government out of health care. That again, is just what we wanted. Lower policies will mean that more people can afford insurance.
“That’s what they said about Obamacare.”
I’m sure you realized that Obamacare was designed to become single payer in the not so distant future. It was never designed to do what Trump’s plan will. “You can keep your own doctor.” I know you didn’t believe that, and I doubt you saw Obamacare for anything more than a sham, like everyone else with a clue here did.
It is a deduction. Spin that any way you like. The middle-class will be helped immeasurably by this system. Why are you attacking something far superior to Obamacare?
As for the lower wage earners, sure, it will probably give them a subsidy to buy insurance. Think about that.
What cost the government more, paying 100% of all health care needs, or helping people purchase insurance that will cover their health care needs?
The government is currently paying 100% of all this groups health care needs. Don’t you think it would be best if the government only paid the premiums, or just helped them pay the premiums instead of paying 100% of all the fees for services?
The money that was expended for Medicaid is where that money would come from. I would suggest a $1000 to $5000 dollar deductible policy. That $1000 to $5000 could be paid off over time, but it would get these folks into a policy in short order, and with that deductible, the costs to insure would be less.
We cannot simply talk about new fees out of the blue, if there is a way to expend the Medicaid costs more wisely.
You and I should realize this is a complex issue. It isn’t going to be 100% of what we want, but I think it could turn out to be a much better system than Obamacare. It’s probably the best possibly replacement for it.
It achieves all the goals we have, returns heath care choices to individuals and providers, and gets government out of micro managing it all.
That's not operating "across state lines." Blue Cross/Blue Shield of Iowa cannot sell or administer health care plans in Illinois, for example. Operating across state lines would mean that BC/BS Iowa could sell in all 50 states, not just Iowa. (Ever wonder exactly why there's a BC/BS in all 50 states and not just one?)
If an insurance company must cover a pre-existing condition, then it's not really insurance.
Yes, it is insurance. I've had four major lower back surgeries, the last one almost ten years ago now. What's the likelihood I'll need lower back surgery number five anytime soon? That's a risk and healthcare insurance is all about risk pooling. Healthy people are lumped in with sick people all the time, happens in every Company across America.
Why is it I can go from job to job and maintain coverage for a "pre existing condition" and then upon losing my job, cannot buy healthcare insurance to cover that same condition out on the open market?
That's a big problem and needs to be fixed. Again, whether it's a big risk pool, high risk insurance pool or some other solution that's fine, as long as those with pre existing conditions can get coverage.
Why? Sometimes cold turkey is the only solution however harsh it may be. Healthcare is not open and free, never has been. Nothing government can do will change that. Government can only make it worse.
The citizens are analog creatures, not digital where you can just flip some switch and everyone snaps two and has it all figured out, fully compliant. Families have budgets that are planned out sometimes years in advance. Business have structures, budgets and backlogs (that may seriously change).
All us complex creatures need transition steps, not a nuke.
Repeal. Period!
That's correct. The 10th Amendment gives a stats the power to regulate insurance companies doing business within its borders.
Trump wants to eliminate these restrictions. Any insurance company should be able to offer services in all 50 states. When you have 250 companies vying for your business, it’s far better than one or even ten.
They can vie for my business now. All they have to do is get approval to sell in Missouri.
But say Trump chooses to ignore the 10th Amendment and passes the law you want. In your scenario of a company in New Jersey not being able to sell in California, there is zero incentive for the company to want to sell a policy in California and zero incentive to buy from the company in New Jersey. And that is because of the way the industry is set up.
Insurance companies control costs by establishing networks of doctors, pharmacies, hospitals, and the like to set the rates the insurance company will pay. Without that agreement then the insurance company has to pay whatever the doctor or hospital charges. They encourage policy holders to use in-network providers by paying a larger percentage of the bill and setting lower deductibles and co-pays. I benefit because my out of pocket expenses are lower.
In your scenario, the insurance company in question does not currently do business in my state so they have no network. They have no way of knowing how much they will have to pay on my claims. They have no cost protections. For the policy holder, every doctors visit they make and every claim they file is out of network so they will pay a higher percentage of the cost. It makes no sense for the company to sell the policy, which they will never make money on. It makes no sense for the customer to buy it, and ensure that they pay more.
Government providing an tax deduction incentive could be termed a government subsidy, but it’s actually a way for you to purchase your medical care for less money.
Isn't that true of any subsidy? Obamacare allows people to buy insurance by subsidizing their premiums. This is no different.
May not be..., that’s what you wish to rest your objection on? You mean that you would rather pay 100% of your health insurance without a tax deduction? Okay, well, just refuse to take the deduction. No problem.
No fear. I get terrific insurance through my employer. I'm not asking the government to pay for it.
Why should any state restrict business within it’s borders?
Do you support that in any other business segments?
Nah, there’s no reason to restrict insurance business.
Each year insurance companies siphon off hundreds of millions of dollars off health care payments to institutions. Translation: Those hundreds of millions of dollars siphoned off the health care dollars, do not cover ten cents worth of services. Don’t try to feed me the schlock that insurance companies are some magnificent benefactors to the health care industry. They are pariahs that limit what services people can have access to.
They also force hospitals to operate on a very thin margin. All sounds well and good, until you think about what hip joint you’ll get, what rehab services you’ll get, how clean the facility will be when you’re in the hospital, what surgery procedures will be used because the institution was forced into it by insurance companies that care more about their profits than the health care provided to their policy holders.
With lowered restrictions, other health care networks will be set up. Insurance companies are just like any other business in that they will provide a different package that hospitals and policy holders will want.
No hospital is going to turn down a better offer, if for one hospital or 50. No insurance company has an absolute lock on a hospital’s business, unless it’s a Kaiser or a captive audience like a Kaiser.
Obamacare payments are deductible? Since when?
Your employer has a stake in the change too. This new system should help them obtain insurance for you at a lower cost.
Do you support a Capitalist free enterprise economy? Are you doubting a free enterprise approach will work?
Your objections to all this sound as if they were torn right out of a union magazine.
Because the Constitution gives them the power to regulate business conducted with in their state.
Nah, there’s no reason to restrict insurance business.
Of course not. Why should any state want to ensure that their citizens are afforded a certain level of protection from unethical businesses?
Obamacare payments are deductible? Since when?
I said they were subsidized, not deductible. Just as healthcare under the Price plan will be.
Your employer has a stake in the change too. This new system should help them obtain insurance for you at a lower cost.
My company, like virtually every other large company, self insures. It contracts with Cigna to manage the health plan and then funds the claims out if its own pocket. Trumpcare is not going to change that.
Your objections to all this sound as if they were torn right out of a union magazine.
And your claims sound as if they are coming from someone without any understanding of how insurance works.
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