“We’re going to have insurance for everybody,” promised President Trump, in a Washington Post interview, just days before taking office. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.” He said that those covered under Obamacare, “can expect to have great healthcare. It will be in a much simplified form. Much less expensive and much better.” He said that this plan is all but finished and that it will contain “much lower deductibles.” Trump indicated that this plan would be unveiled as soon as his nominee for secretary of Health and Human Services is confirmed.
Rep. Tom Price, a Tea Party Republican from Georgia, is Trump’s nominee for that position. As House Budget Committee chairman, Price has proposed deep cuts to Medicare and Medicaid. At his confirmation hearing, under questioning from Sen. Elizabeth Warren, Price did not deny that his proposed budget contained $449 billion in Medicare cuts and more than a trillion dollars in Medicaid cuts over the next decade. The plan includes a partial privatization of Medicare in which Medicare is transformed into a market exchange where seniors receive a federal subsidy to buy insurance from a menu of options.
According to Families USA, the damage to the Medicaid program would be even worse: “The plan would radically restructure the traditional Medicaid program into a block grant, resulting in $1.8 trillion in cuts to federal Medicaid spending. House Republicans propose to shift those cuts to the states, adding additional strain to state budgets. But the reality is there is no way states will be able to make up for that lost federal funding. For all the plan’s talk of giving states flexibility, the only flexibility it would really give states is the flexibility to decide who and what services to cut from Medicaid.”
Price has also introduced his own legislation to repeal and replace Obamacare. It is called the “Empowering Patients First Act” and these are the five major elements of that plan:
Fixed tax credits so people can buy their own insurance on the private market. The credits start at $1,200 a year and rises with age, but isn’t adjusted for income.
Expansion of health savings accounts, which allows a tax deduction for those people rich enough to save money for future health care needs.
People with pre-existing medical conditions could be denied coverage if they had failed to maintain continuous coverage for 18 months prior to selecting a new policy. In that event, coverage could be excluded for the first 18 months of the new policy.
The Price plan limits the amount of money companies can deduct from their taxes for employee health insurance expenses. Companies would be allowed to deduct up to $20,000 for a family health insurance plan and up to $8,000 for an individual plan.
States would get some federal money to create high risk pools for people with pre-existing medical conditions who can’t obtain affordable health insurance in the private market. Such pools have been tried in many states and have largely failed because they have routinely been underfunded.
In an editorial entitled, “Care for the Vulnerable vs. Cash for the Powerful,” the prestigious New England Journal of Medicine gives a scathing review of Tom Price’s Congressional record and his proposed health care plan. The following is part of that editorial:
“Price’s record demonstrates less concern for the sick, the poor, and the health of the public and much greater concern for the economic well-being of their physician caregivers… His record shows long-standing opposition to policies aimed at improving access to care for the most vulnerable Americans. In 2007-2008, during the presidency of George W. Bush, he was one of only 47 representatives to vote against the Domenici-Wellstone Mental Health Parity and Addiction Equity Act, which improved coverage for mental health care in private insurance plans. He also voted against funding for combating AIDS, malaria, and tuberculosis; against expansion of the State Children’s Health Insurance Program; and in favor of allowing hospitals to turn away Medicaid and Medicare patients seeking non-emergency care if they could not afford copayments.
Price favors converting Medicare to a premium-support system and changing the structure of Medicaid to a block grant - policy options that shift financial risk from the federal government to vulnerable populations…
Price has also been a vociferous opponent of the Affordable Care Act (ACA) and a leader of the repeal-and-replace movement. His proposal for replacing the ACA, the Empowering Patients First Act, which would eliminate the ACA’s Medicaid expansion and replace its subsidies with flat tax credits based on age, not income ($1,200 per year for someone 18 to 35 years of age; $3,000 for someone 50 or older, with an additional one-time credit of $1,000 toward a health savings account).
Price’s plan is regressive: It offers much greater subsidies relative to income for purchasers with high incomes and much more meager subsidies for those with low incomes. In today’s market, these credits would pay only about one third of the premium of a low-cost plan, leaving a 30-year-old with a premium bill for $2,532, and a 60-year-old with a bill for $5,916 - along with a potential out-of-pocket liability of as much as $7,000.
By contrast, subsidies under the ACA are based on income and the price of health insurance. Today, a low-income person (with an income of 200 percent of the federal poverty level) pays, on average, a premium of $1,528 per year regardless of age) for a plan with an out-of-pocket maximum of $2,350, and that payment does not change even if health insurance premiums rise.
The Price plan would eliminate the guaranteed-issue and community-rating requirements in the ACA and create anemic substitutes for these commitments to access to comprehensive coverage for Americans with pre-existing conditions. These replacements include an extension to the nongroup market of the continuous-coverage rules that have long existed in the group market with little benefit; penalties on reentering the market for anyone who has had a break in coverage; and a very limited offer of funding for states to establish high-risk pools. In combination with relatively small tax credits, these provisions are likely to lead low-income and even middle-class people to forgo seeking coverage until a serious health problem develops. Without the income-and premium-based subsidies in the ACA acting as market stabilizers, Price’s provisions would erode the nongroup health insurance market.
Price’s plan would withdraw almost all the ACA’s federal consumer protection regulations, including limits on insurer profits and requirements that plans cover essential health benefits. By allowing the sale of health insurance across state lines, the plan would also effectively eliminate all state regulation of health insurance plans, encouraging a race to the bottom among insurance carriers…
In sum, Price’s replacement proposal would make it much more difficult for low-income Americans to afford health insurance. It would divert federal tax dollars to people who can already buy individual coverage without subsidies and substantially reduce protections for those with pre-existing conditions. The end result would be a shaky market dominated by health plans that offer limited coverage and high cost sharing…
His Empowering Patients First Act would directly advance physicians’ economic interests by permitting them to bill Medicare patients for amounts above those covered by the Medicare fee schedule and allowing them to join together and negotiate with insurance carriers without violating antitrust statutes. Both these provisions would increase physicians’ incomes at the expense of patients…”
Trump’s promise of coverage for everybody means absolutely nothing because his words have no credibility. It is highly likely that he does not even know the difference between the guaranteed coverage of Obamacare and the mere access to coverage that Price is offering.
At his confirmation hearing, Price claimed that his goal was high-quality health care access to all Americans. Sen. Bernie Sanders pointed out the obvious flaw to Price’s position: “‘Has access to’ does not mean they are guaranteed health care,” explained Sanders. “I have access to buying a $10 million home, I don’t have the money to do that.”