Rep. Tom Price of Georgia on Tuesday was nominated as the new secretary of health and human services by President-elect Donald Trump.
Price has an impressive record in the healthcare field, as a former orthopedic surgeon. He is also a vocal critic of the Affordable Care Act, better known as Obamacare, and perhaps signals Trump's seriousness in intending to dismantle the law.
"The Trump administration's mantra has been that the ACA is a disaster and the only way to fix it is to repeal and replace it, and this appointment seems to confirm that idea," Timothy Jost, a law professor and health-policy expert at Washington and Lee University and an advocate of the ACA, told Business Insider.
Price has been at the forefront of congressional fights to repeal and replace President Barack Obama's signature health law.
While Trump's own details on how to replace the law have been spotty, Price has written legislation called the Empowering Patients First Act, which would repeal most of the sections of Obamacare and shift toward what Republicans call a "market-based" approach.
How it would work
Price's plan would significantly restructure the benefits given to Americans without health insurance through their employer or the government. Price's plan structures these tax credits based on age brackets — $1,200 for people aged 18 to 35, and up to $3,000 for those 50 years and older. This is different from the ACA, which bases its tax credits on the income of the patient.
Another key aspect of Obamacare — one Trump has said he would consider keeping — that prevents insurers from denying coverage due to a preexisting condition, would change. Under Price's proposal, people would be able to continue coverage if they shifted from the employer market to the individual market, but only if they have no interruptions in coverage. Thus, a break in care would allow insurers to deny coverage to people with an illness.
For those that do not maintain that care, Price's plan would institute state-level high-risk pools to help cover them. The Price plan would provide $1 billion in federal funding to help control costs for these pools. The Commonwealth Fund, a nonpartisan health-policy think thank, estimates that these pools would require well over $170 billion a year in federal funding to cover those with ACA-based plans now, however.
Additionally, such high-risk pools typically have premium costs double those of normal individual market plans.
The expansion of Medicaid under Obamacare would also be rolled back under Price's plan, shifting roughly 15 million people from the government-sponsored insurance to the individual marketplace. The expansion provided coverage for those making roughly $16,490 and below annually. Even with a subsidy, questions loom over how affordable it will be for those people to obtain plans on the individual market.
In total, Price's proposal bears much of the same hallmarks of other Republican plans from congressional leaders, such as House Speaker Paul Ryan, who called Price the "absolute perfect choice" for the position in Trump's Cabinet.
"We could not ask for a better partner to work with Congress to fix our nation's healthcare challenges," Ryan said in a statement.
'Asking the fox to guard the hen house'
The appointment of Price has drawn criticism from Democrats and advocates of the Affordable Care Act. Incoming Senate Minority Leader Chuck Schumer said Price's healthcare proposals are "far out of the mainstream of what Americans want."
"Nominating Congressman Price to be the HHS secretary is akin to asking the fox to guard the hen house," said Schumer's statement.
Jost said Price's proposals would, incidentally, end up hurting many of the people who elected Trump to the White House.
Price's plan "shows where we're heading," Jost told Business Insider. "It will help wealthier people and does nothing to help the working-class people who actually voted for Trump."
Critics point to potential rollbacks of provisions in the ACA that compel insurance companies to provide certain types of care, meaning insurance companies could exclude comprehensive coverage needed by sick people need. For older individuals, Price's plan would take away the provision linking what insurers can charge young people compared to seniors, providing the potential for insurers to jack up rates for older people with chronic-care needs.
Even for the majority of Americans that get their insurance through their employer, Jost said, might see their costs increase under a Price-type plan. Currently, those with insurance through their workplace do not pay federal taxes on premiums paid to these plans.
Price's plan would cap this at $20,000 for a family and $8,000 for an individual. While such a provision could hurt affordability for those with employer-based insurance, according to the Tax Policy Center, the exemption cost the federal government $250 billion in lost taxes in 2015.
Jost also suggested many of the provisions in Price's plan — such as state-level tribunals for malpractice cases and limitations on what patients may use in cases as evidence against a doctor — are designed to guard physicians from patients.
"The bill should probably be called 'Empowering Doctors First,'" Jost told Business Insider. "He's a doctor, and it's clear he is trying to shield doctors."
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