Wednesday, November 30, 2016

A MAN WITH A PLAN. Trump picked Rep. Tom Price of Georgia as his Secretary of Health and Human Services. Price actually has a plan to replace Obamacare
Price, in contrast, has actually drilled down, a sign of his seriousness about tackling the challenges of U.S. health care policy. Many of the Republican replacement plans take the form of statements of principle or white papers. Price's plan, on the other hand, already exists in legislative form, as a 250-page bill known as the Empowering Patients First Act. The plan offers a level of detail that allows you to better imagine how it might work, and what sort of trade-offs it might entail.

The plan has a number of virtues, including its specificity, its emphasis on eliminating mandates, and its potential for massive reductions in federal spending. But it also comes with some risks and concerns, and, because Congress controls the legislative process, it may not prove the best guide as how Republicans end up treating health care in the Trump era.

Price's plan is focused on getting rid of a lot of the rules and regulations that make coverage under Obamacare expensive. It would eliminate the health law's essential health benefits rules—the list of mandates that require insurers to include a government-determined list of features, whether or not they're wanted. This would free up insurers to offer a wider array of types of coverage, and could help make coverage cheaper for many people, especially those who are in relatively good health and don't want or need comprehensive coverage. It would also allow for the purchase of health insurance across state lines to an even greater extent than already allowed under Obamacare.

Price's plan offers two mechanisms for sicker individuals who might be sicker and more expensive to cover: a provision that does not allow insurers to charge more for health conditions so long as someone maintains continuous coverage, and $3 billion in funding, over a three year period, for high risk pools. The continuous coverage provision is designed to encourage people to find insurance when they are young and then stick with it in hopes of creating a sustainable, long-term insurance pool—something that Obamacare, which has struggled to attract young people, has had trouble with so far. The $3 billion in funding for high risk pools—which comes to $1 billion a year—would help cover some of the hard cases, but may end up being too little for the job: Obamacare's high risk pools, which bridged the gap between when the law was signed and when its coverage provisions kicked in, ended up drawing a far more expensive patient pool than expected. And other Republican plans that rely on high risk pools estimate the cost at more like $2.5 billion a year.

Price's plan would result in a huge net savings to the federal government—about $2.3 trillion over a decade, according to a 2013 analysis by former Congressional Budget Office Director Douglas Holtz Eakin. So even with a significant increase in high risk pool funding, the plan would still represent a significant trimming of the country's budget.

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