Secretary Price’s ACA Replacement Plan

February 17, 2017 at 9:22 AM Leave a comment

Is the Price Right?

U.S._Congressman_Tom_Price_speaking_at_Freedomworks_New_Fair_Deal_Rally_outside_the_US_Capitol.jpg

Photo by Gage Skidmore

On February 10th, Rep. Tom Price was confirmed as Secretary of Health and Human Services on a party line vote, 52-47.  As such, it seems prudent to learn a bit about his plans for reshaping American health care.  The good news is that there is already a document that gives us a detailed view of what he’d like to see in law: he was lead sponsor of the Empowering Patients First Act, that passed the House in 2015.  The bad news is that it’s 242 pages long.   So here are some important points about it:

  • EPFA has many of the elements Republicans have been clamoring for during the last eight years, including expansion of Health Savings Accounts, selling insurance across state lines, association health plans, and high risk pools.
  • To replace the individual mandate, there are continuous coverage provisions. This allows insurance companies to charge a premium for those who have not had recent coverage, as a deterrent to those who would otherwise wait until they’re sick to get insurance.
  • To replace the Cadillac tax on especially rich health coverage, there is a limit on deductibility of health insurance for companies. While wonks will argue about the difference between these two arcane provisions, the intent and effect of them are the same.  Both are intended to blunt the effect of rich health coverage on increasing utilization.  This isn’t popular with some in the Republican party, but it’s in here nonetheless.
  • To replace the subsidies in the marketplaces/exchanges, there are refundable and advanceable tax credits. So instead of using federal dollars to make coverage more affordable, Dr. Price uses federal dollars to make coverage more affordable.  EPFA is different, however, in that while the ACA subsidies are only available to lower income individuals, everybody gets access to the tax credits regardless of income.  So even the wealthy will get some federal dollars to buy health insurance.
  • EPFA contemplates the return of annual and lifetime maximums. Effectively this opens the door to “running out of insurance” again, not a comforting thought but something that will make insurance cheaper for everyone else.  You get what you pay for.
  • Medicaid provisions are a bit vague, but speak about states needing to submit plans to insure 90% of children under government programs or commercial insurance. Notably missing are details of coverage for childless adults, a big portion of the expansion population.  This leads many to conclude there might not be coverage for those folks under a Price HHS.

There are other competing Republican plans out there, and it remains to be seen how much the final repeal and replace effort resembles Secretary Price’s plan while a member of the House.  But it is noted in the press that his plan is one of the more aggressive in rolling back key provisions of the ACA.  Many of these same provisions appear in the draft that just came out of the House, which was drawn on A Better Way, the speaker’s plan. capture

 

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