Tom Price's health care plan: How much insurance costs would rise if Obamacare is repealed


President-elect Donald Trump selected Georgia Rep. Tom Price to be his secretary of Health and Human Services on Monday. Price has been one of the most outspoken critics of the Affordable Care Act — aka Obamacare — amplifying the expectation that President Barack Obama's signature legislation will be repealed under a Trump presidency. 

Former GOP Speaker of the House Newt Gingrich mentioned repealing the ACA in his congratulatory tweet regarding the selection of Price.

And Trump himself has repeatedly declared he would make repealing the ACA a priority. "I will ask Congress to convene a special session so we can repeal and replace [the ACA]," Trump said one week before the election at a rally in Pennsylvania, NBC News reported. "Obamacare has to be replaced, and we will do it. And we will do it very, very quickly. It is a catastrophe."

Despite Trump's suggestions in an interview with the Wall Street Journal that he might keep elements of the ACA, he is signaling with his choice of Price that his threats to repeal the law are serious.

As the chairman of the Congressional Budget Committee since 2015, Price, a former orthopedic surgeon, has been a leader of the GOP's recent attempts to undo the ACA. Republicans have attempted to repeal the ACA 63 times since it was signed into law in 2010. 

What is Tom Price's health care plan? Here's what you need to know about the Empowering Patients First Act.

Price helped draft a bill that was meant to be an alternative to the ACA — the Empowering Patients First Act — although health care experts have their concerns.

One big worry is that the name of Price's bill belies the higher costs patients, particularly those with lower incomes, could actually end up paying for insurance and care.

"Empowering doctors is really a better name for it," said Tim Jost, a health law professor at Washington and Lee University School of Law. "There's a lot of stuff in there about medical malpractice reform. It would allow doctors to contract with Medicare patients above what Medicare currently allows. It protects doctors from rate regulations and gives doctors who treat patients in the ER ... tax benefits."

If the ACA is repealed, the Trump administration may have to deal with blowback from the 24 million people insured since the passage of ACA. Millions of people may lose their health insurance entirely, and one study from the RAND Organization and the Commonwealth Fund found that repealing the ACA would increase average out-of-pocket costs in the individual marketplace by as much as $1,500 annually by 2018. It could, in the process, also increase the federal deficit by over $33 billion, the study concluded. 

It's unclear exactly how much Price's plan would buffer against those higher prices, though his bill includes a couple of provisions aimed at bringing costs down for patients: Tax credits for people to buy insurance on private marketplaces, and a one-time tax credit for health savings accounts.

Jost said that while tax credits help middle-income taxpayers more than deductions do, those in Price's plan are unlikely to be as substantial as the tax credits given out under the ACA.

Under Price's plan, people unable to get insurance would be redirected to "high risk" pools set up by the states and funded partially through government grants. But the size of the grants proposed in Price's plan were "far, far below," what would be needed to cover all the people who would qualify as "high risk," Jost said.

Even people with health insurance through a job could see out-of-pocket costs rise, Jost said, because the bill proposes a cap on tax perks for employers, which could incentivize companies to share more costs with employees.

Repealing the ACA could also remove many protections in place for women's reproductive health coverage — Price has a zero rating from Planned Parenthood and a perfect rating from the National Right to Life Committee on women's health and abortion issues.

Finally, Price's emphasis on health savings accounts, Jost said, are generally less helpful to middle and low-income people: "It's the best tax shelter out there ... So it's of value for people who have income they want to shelter from taxes."

What is the likelihood of a full repeal of the ACA? 

While outright repeal of the law wouldn't be easy, it was one of Trump's signature campaign promises — and he would have a supportive Congress.  

Republicans do not have the 60 seats they need for a supermajority — which would otherwise allow them to unilaterally, as a party, fully repeal the ACA. They have 54, which means quick repeal of the law would be challenging without bipartisan consensus. Still, Trump could seriously undermine the ACA through executive order.

Sources told NPR that, faced with legislative obstruction, President Barack Obama has often used executive order to plug holes and fix problems with the ACA as they have come up. Trump could undo those actions with the stroke of his pen and seriously weaken the law, for instance, by blocking payments to insurers who are being subsidized.

Longer term Republican efforts to replace the law could include axing government subsidies — which make insurance affordable, particularly for lower-income people — and weakening Medicaid, while eliminating individual and employer mandates.

Price has previously indicated that he would overhaul Medicaid and Medicare in a way that could loosen protections for patients.

In general, Democrats have argued that in the absence of government intervention, the market will be prone to abuses by insurance companies and insurance prices could increase. 

"[Republicans] made the public think Obamacare caused all the trouble," Don Berwick, a former Medicare administrator under Obama, told Kaiser Health News. "That's absolutely wrong — they could repeal it tomorrow and costs would continue to go up."

In 2014, premiums for the mid-range plan offered under the ACA were an estimated 10% to 21% cheaper than a comparable plan was before the law was fully in place in 2013, for example.

Correction: Nov. 29, 2016