Tom Price's Last Known Plan to Replace 'Obamacare'

Georgia Rep. Tom Price previously proposed repealing the Affordable Care Act.

ByABC News
January 18, 2017, 9:56 AM

— -- With President-elect Donald Trump pledging to "repeal and replace" the Affordable Care Act, many have been looking for signs of what a replacement might look like. One clue may be a plan proposed in 2015 by his pick for secretary of health and human services, Rep. Tom Price, R-Ga., who will testify on Capitol Hill today.

Price, a longtime critic of the ACA, is a member of the House GOP Doctors Caucus, which is made up of congressional members who are doctors and focuses on developing patient-centered health care policy. He served for several years as chairman of the Republican Study Committee, a large and influential conservative House caucus.

A year after the ACA passed, Price released a statement calling the law "a costly and misguided encroachment of government that will destroy jobs and drive our nation further toward a fiscal crisis."

He characterized the law as "failing" and argued that it should be replaced.

"The purpose of health reform should be to advance accessibility, affordability, quality, responsiveness and innovation," Price said at the time. "None of these are improved by 'Obamacare.' They are threatened by 'Obamacare' because the goal of this law is to expand authority for the government, not opportunity and choices for the American people."

Price's Proposal to Repeal the ACA

In 2015, Price introduced the Empowering Patients First Act of 2015 in the House.

In the legislation, he proposed an increase in the amount people could contribute to their health savings accounts, expanding tax-deductible contributions and allowing the accounts to pay some primary care fees.

The proposal included a requirement that HHS would "provide a grant to each state for high-risk pools or reinsurance pools to subsidize health insurance for high-risk populations and individuals."

High-risk health pools could be used to give people who are often challenged in finding affordable insurance because of existing conditions, age or other factors another option to find insurance outside of employer-based coverage.

Before the ACA, many states had high-risk pools to cover residents who otherwise would not be insured because of existing conditions. The Kaiser Family Foundation found that state high-risk pools often had significantly higher premiums and likely included just a small fraction of people who needed coverage.

Under the ACA, insurance companies are mandated to provide coverage to people with existing conditions and are prohibited from charging them higher premiums. Insurers also may not charge women more than men.

Price's proposed legislation calls for individuals to receive tax credits to help pay for medical coverage. The plan increases the tax credits as a person ages, with a top level of $3,000. Tax credits, tax deductions and authorized funds in this plan could not be used to fund most abortions.

Under the ACA, federal tax subsidies are given based on income up to a certain level, which varies by state.

Federal protections for existing conditions would be weakened but not eliminated under Price's 2015 proposal. Insurance companies could charge up to 150 percent of standard premiums for two years if the individual has not had continuous health insurance for the last 18 months.

His plan also proposed allowing individuals to opt out of government health care programs like Medicare or Medicaid and receive a tax credit instead. Medicare patients would be able to pick doctors outside the Medicare system without penalty.

Additionally, the bill proposed a transfer of power to states to govern health insurance laws, which could eliminate current federal existing-condition rules in favor of giving states incentives to pass their own laws on such protections.

The 'Better Way' Proposal

Price has publicly supported Rep. Paul Ryan's call for repealing and replacing the ACA, using his "better way" plan.

In an op-ed published by The Journal of the American Medicine Association Forum, Price and other members of the House GOP Doctors Caucus wrote that they supported aspects of Ryan's plan, "such as expanding health savings accounts, providing portable financial assistance for health insurance and making it easier for individuals and small businesses to pool together to purchase health insurance."

Ryan's plan cites Price's 2015 proposed legislation.

Among the changes proposed in Ryan's plan, individuals could create group-plan coverage outside of the workplace, get tax credits to offset the cost of health care and buy health insurance across state lines.

The proposal would allow health insurance companies to open up the age ratio to bring down costs for younger consumers. Currently, the ACA has a 1 to 3 maximum price ratio for young to old patients, meaning the cost of a plan for the oldest patients may not be more than three times as expensive as a plan for the youngest patients. The "better way" proposal seeks to allow a 1 to 5 maximum for insurance payment plans.

The nonpartisan Rand Corp., a public policy think tank, modeled the proposed change in ratio and found that "premiums increase even more and enrollment falls further."

Similar to Price's legislation, Ryan's plan would provide Medicare and Medicaid enrollees a fixed amount of money to apply toward health insurance rather than offer coverage through the government.

Christine Eibner, a senior economist and professor at Pardee Rand Graduate School, who authored the policy paper with the age ratio model, said that giving Medicare and Medicaid enrollees a tax credit instead could ease the cost burden on the government but redirect it to consumers.

"It reduces federal government obligations over time," she explained, saying it would be simpler because the cost per enrollee would remain the same.

"The drawback with an approach like this is it puts the risk of increased spending on the enrollee," Eibner said, "if it causes premiums to go up and it's not taken into account."

Existing Conditions

Despite his 2015 plan outlined in the JAMA Forum op-ed, Price and his co-authors said they wanted to continue coverage for existing conditions.

"We believe in providing pre-existing condition protections and bringing fairness to insurance premiums by addressing the cost drivers in health care, including medical malpractice improvements to address the practice of defensive medicine and changing the age-rating ratio," the doctors wrote. "Let us be clear: No one is talking about returning to the pre-ACA status quo, but there is a better way to achieve health system reform in this country."

The Affordable Care Act, aimed at making health insurance available to more people and overhauling the complicated health care industry in the U.S., has been the subject of conservative scrutiny and scorn since it passed in 2010.

Congressional Republicans have tried to repeal the law numerous times under President Barack Obama. While the law has been criticized because of increasing premiums, it has also won praise as the number of uninsured Americans has continued to drop and the growth of health care costs has slowed.

ABC News' John Santucci and Benjamin Siegel contributed to this report.

Related Topics