Tom Price, a longtime opponent of Obamacare, is President-elect Donald Trump’s pick for Secretary of the Department of Health and Human Services (HHS). This selection supports Trump’s plan to start the process of repealing Obamacare “right out of the gate”—as Vice President-elect Mike Pence stated just a few days before this announcement.

 

Tom Price’s healthcare proposal detailed in his Empowering Patients First Act could significantly influence reform polices under Trump’s healthcare plan. Price, a former orthopedic surgeon and current House Budget Committee (R-GA) chair since 2015, made a statement back in 2011 that “the purpose of health reform should be to advance accessibility, affordability, quality, responsiveness, and innovation.” He also commented that “none of these are improved” by the Affordable Care Act (ACA). This may be why Trump said Price is “exceptionally qualified to shepherd our commitment to repeal and replace Obamacare and bring affordable and accessible healthcare to every American.”

The Empowering Patients First Act summary below sheds some light on the potential reality of health insurance for Americans if Price takes the seat as head of the HHS and his policies are adopted.

Highlights of Tom Price’s Healthcare Proposal

  1. Require continuous coverage for preexisting conditions
  2. Provide funding for high-risk pools
  3. Make insurance better for the young and healthy
  4. Provide tax credits based on age
  5. Expand the use of health savings accounts (HSAs)
  6. Repeal Medicaid expansions
  7. Limit tax exclusions for employer-sponsored coverage

1. Require Continuous Coverage for Preexisting Conditions

Current ACA laws require that insurance companies provide health coverage to Americans regardless of having prior health conditions. This is upheld in both Tom Price’s healthcare proposal and Donald Trump’s healthcare plan. But Price’s proposal differs from the ACA in that guaranteed acceptance would only be offered if continuous coverage is maintained for at least 18 months before enrolling in a new plan. And companies would be allowed to charge higher premiums if continuous coverage is not maintained. This stance on continuous coverage is popular among Republicans and is featured in House Speaker Paul Ryan’s A Better Way policy paper.

2. Provide Funding for High-Risk Pools

The Empowering Patients First Act proposes that states set up high-risk pools to provide health insurance to those who are denied coverage by insurance companies in the individual market. These high-risk pools under Price’s plan are set to be funded with $3 billion over 3 years, which is much less than Ryan’s plan to fund high-risk pools with $25 billion ($2.5 billion per year) over a 10-year period.

3. Make Insurance Better for the Young and Healthy

Republicans in general think that the Obamacare benefit package is too large. The logic here is that having a comprehensive benefits package is a factor in higher premiums, which could turn off younger people and dissuade them from buying insurance. Price’s healthcare proposal aims to make the individual insurance market better for younger and healthier Americans, which involves getting rid of the ACA’s 10 essential health benefits mandate that applies to Marketplace health plans. This proposal is in alignment with Donald Trump’s healthcare reform plan, which involves restricting the federal government from deciding which benefits health plans are required to offer. Price’s reform would affect these 10 essential benefits:

  1. Ambulatory patient services
  2. Hospitalization
  3. Emergency services
  4. Pregnancy, maternity, and newborn care
  5. Mental health and substance use disorder services
  6. Prescription drugs
  7. Rehabilitative and habilitative services and devices
  8. Laboratory services
  9. Preventive and wellness services
  10. Pediatric services

Other ways Tom Price’s healthcare proposal aims to make buying health insurance better for young Americans is to require that companies charge younger enrollees lower premiums—simultaneously allowing companies to set their own rates for older people. Under current ACA laws, insurance companies are only allowed to charge an older enrollee a premium rate that’s up to 3 times higher than what the youngest enrollee pays.

4. Provide Tax Credit Based on Age

Price’s Empowering Patients First Act would give a refundable tax credit to people who buy insurance in the individual market. The tax credits don’t take income into account, but they favor older Americans who would end up getting more. The tax credits detailed in the act are:

  • $900 for children under 18
  • $1,200 for adults 18 to 35
  • $2,100 for adults 36 to 50
  • $3,000 for adults 51 and older

5. Expand the Use of Health Savings Accounts (HSAs)

Price’s healthcare proposal on HSAs would allow Americans to save money tax-free to use for healthcare expenses, which is also a reform that Trump proposes. Price’s plan includes providing a one-time tax credit of $1,000 toward HSA contributions, and allowing people who get coverage through government health insurance programs the choice to use HSA contributions for paying premiums and copayments.

6. Repeal Medicaid Expansion

Since Medicaid state expansions began in 2014, over 15 million people have signed up for Medicaid benefits. Continued enrollment could be affected because Price’s reform calls for a full repeal of Medicaid expansions. The likelihood of this proposal being implemented as part of Trumpcare could be high because Trump’s healthcare plan is already in favor of limiting federal funding for Medicaid and allowing states to have more control of running the Medicaid program. The Empowering Patients First Act summary doesn’t mention a replacement proposal, so Trump could also follow suit.

7. Limit Tax Exclusions for Employer-Sponsored Coverage

Employers are allowed to deduct expenses for employee group health coverage on their business taxes. These tax breaks contribute to a loss in revenue for the government, and some economists propose that tax breaks be eliminated, or at the least, reduced. Tom Price’s healthcare proposal on limiting employer tax exclusions to $8,000 for individual plans and $20,000 for family plans aligns with the viewpoints of some economists because it plays a role in reducing tax breaks on health insurance overall. This proposal may fit with Donald Trump’s healthcare plan to maintain employer-sponsored health insurance. However, Trump has not provided any specifics about what this would look like.

Other Tom Price Healthcare Proposals

  • Medicare: Price agrees with Medicare premium support and expects the GOP to move forward with plans to implement changes to Medicare in 2017.
  • Balanced billing: Price is in favor of doctors being allowed to contract with Medicare patients, charge a fee for services, and bill patients for extra charges that are over the Medicare-approved amount.
  • Abortion funding: Price wants to limit the use of federal dollars to pay for abortions and protect doctors who don’t want to perform abortions for religious reasons.

What Should Americans Do?

The best thing Americans should do when it comes to proposed healthcare reform is to continue with business as usual under the current Obamacare law because the repeal-and-replace process is unlikely to happen overnight. Tom Price’s healthcare proposals, as well as those proposed for Trumpcare, aren’t set in stone—you’re still required to have minimum essential coverage. And with the Obamacare open enrollment deadline on January 31, 2017, approaching fast, you may need the help of a knowledgeable insurance agent now more than ever. At no cost to you, a HealthMarkets licensed insurance agent can provide you with access to thousands of affordable health insurance plans and check to see if you qualify for premium subsidies. Just give us a call at (800) 304-3414 and get a free health insurance quote today!

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References

http://www.politico.com/tipsheets/politico-pulse/2016/11/trump-to-prioritize-obamacare-repeal-insurer-mega-merger-trials-get-underway-how-cmmi-could-survive-217513  |  http://money.cnn.com/2016/11/28/news/economy/tom-price-trump-health-secretary/index.html  |  http://www.npr.org/sections/health-shots/2016/11/29/503720671/5-things-to-know-about-rep-tom-prices-health-care-ideas  |  http://www.cnbc.com/2016/11/29/by-picking-tom-price-to-lead-hhs-trump-shows-hes-absolutely-serious-about-dismantling-obamacare.html  |  https://www.donaldjtrump.com/positions/healthcare-reform

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