Tag Archives: Tom Price

Five Questions About This Week’s “Repeal-and-Replace” Developments

At a Thursday morning press conference, Speaker Ryan and House leaders unveiled amendment language providing an additional $15 billion in funding for “invisible high risk pools,” which the House Rules Committee was scheduled to consider Thursday afternoon. That amendment was released following several days of conversations, but no bill text, surrounding state waivers for some (or all—reports have varied on this front) of Obamacare’s “Big Four” regulations—guaranteed issue, community rating, essential health benefits, and actuarial value. Theoretically, states could use the risk pool funds to subsidize the costs of individuals with pre-existing conditions, should they decide to waive existing Obamacare regulations regarding same.

Given these developments regarding risk pools and waivers and regulations (oh my!), it’s worth posing several key questions about the still-fluid discussions:

Do Republicans believe in limited executive authority, or not?

The text of the amendment regarding risk pool funding states that the Administrator of the Centers for Medicare and Medicaid Services (CMS) “shall establish…parameters for the operation of the program consistent with this section.”

That’s essentially all the guidance given to CMS to administer a $15 billion program. Following consultations with stakeholders—the text requires such discussions, but doesn’t necessarily require CMS to listen to stakeholder input—the Administration can define eligible individuals, the standards for qualification for the pools (both voluntary or automatic), the percentage of insurance premiums paid into the program, and the attachment points for insurers to receive payments from the program.

This extremely broad language raises several potential concerns:

  • Health and Human Services Secretary Tom Price has previously cited the number of references to “the Secretary shall” or “the Secretary may” in Obamacare as showing his ability to modify, change, or otherwise undermine the law. Republicans who give such a broad grant of authority to the executive would allow a future Democrat Administration to return the favor.
  • Nothing in the amendment text directs funding towards the states that actually utilize the waiver process being discussed. In other words, states that opt-out of the Obamacare regulations, and wish to utilize the funds to help individuals with pre-existing conditions affected by same, could lose out on funding to those states that retain all of the Obamacare regulations.
  • The wide executive authority does little to preclude arbitrary decisions by the executive. If the Administration wants to “come after” a state or an insurer, this broad grant of power may give the Administration the ability to do so, by limiting their ability to claim program funds.

As I have previously written, some conservatives may believe that the answer to Barack Obama’s executive unilateralism is not executive unilateralism from a Republican Administration. Such a broad grant of authority to the executive in the risk pool program undermines that principle, and ultimately Congress’ Article I constitutional power.

Do Republicans believe in federalism, or not?

Section (c)(3) of the amendment text allows states to operate risk pools in their respective states, beginning in 2020. However, the text also states that the parameters under which those state pools will operate will be set at the federal level by CMS. Some may find it slightly incongruous that, even as Congress debates allowing states to opt-out of some of Obamacare’s regulations, it wants to retain control of this new pot of money at the federal level, albeit while letting states implement the federally-defined standards.

How is the new funding for “invisible high risk pools” substantively different from Obamacare’s reinsurance program?

Section (d)(5) of the amendment text requires CMS to establish “the dollar amount of claims for eligible individuals after which the program will provide payments to health insurance issuers and the proportion of such claims above such dollar amount that the program will pay.”

The amendment language echoes Section 1341(b)(2) of Obamacare, which required the Administration to establish payments to insurers for Obamacare’s reinsurance program. That existing reinsurance mechanism, like the proposed amendment text, has attachment points (an amount at which reinsurance kicks in) and co-insurance (health insurers will pay a certain percentage of claims above the attachment point, while the program funding will pay a certain percentage).

Congressional leadership previously called the $20 billion in Obamacare reinsurance funding a “bailout” and “corporate welfare.” But the $15 billion in funding under the proposed amendment echoes the Obamacare mechanism—only with more details missing and less oversight. Why do Republicans now support a program suspiciously similar to one that they previously opposed?

Why do conservatives believe any states will actually apply for regulatory waivers?

The number of states that have repealed Obamacare’s Medicaid expansion thus far is a nice round figure: Zero. Given this experience, it’s worth asking whether any state would actually take Washington up on its offer to provide regulatory relief—particularly because Congress could decide to repeal all the regulations outright, but thus far has chosen not to do so.

Moreover, if Congress places additional conditions on these waivers, as some Members have discussed, even states that want to apply for them may not qualify. Obamacare already has a waiver process under which states can waive some of the law’s regulations—including the essential health benefits and actuarial value (but not guaranteed issue and community rating). However, those waiver requirements are so strict that no states have applied for these types of waivers—Health Savings Account and other consumer-directed health care options likely do not meet the law’s criteria. If the House plan includes similarly strict criteria, the waivers will have little meaning.

Will the Administration actively encourage states to apply for regulatory waivers?

President Trump has previously stated that he wants to keep Obamacare’s pre-existing conditions provisions in place. Those statements raise questions about how exactly the Administration would implement a program seeking to waive those very protections. Would the Administration actively encourage states to apply? If so, why won’t the Administration support repealing those provisions outright—rather than requiring states to come to the federal government to ask permission?

Conversely, if the Administration wishes to discourage states from using this waiver program, it has levers to do so. As noted above, the current amendment language gives the Administration very broad leeway regarding the $15 billion risk pool program—such that the Administration could potentially deny funds to states that move to waive portions of the Obamacare regulations.

The combination of the broad grant of authority to the executive, coupled with the President’s prior comments wanting to keep Obamacare’s pre-existing conditions provision, could lead some conservatives to question whether or not they are being led into a potential “bait-and-switch” scenario, whereby the regulatory flexibility promised prior to the bill’s passage suddenly disappears upon enactment.

Obamacare versus the American Health Care Act

A PDF version of this document can be found on the Texas Public Policy Foundation website.

Obamacare

House GOP Proposal

Refundable tax credit entitlement

Check

Section 1401, Page 129

Check

Page 23 of Ways and Means bill

Raid Medicare to pay for new entitlement

Check

“President [Obama] took $716 billion from the Medicare program—he raided it—to pay for Obamacare” (Rep. Paul Ryan)

Check

Medicare savings RETAINED to pay for Ryancare entitlement spending

Allow illegal aliens to receive new entitlement

Check

“Insufficient and ineffective verification methods…allow for illegal immigrants to access the Exchange and subsidies” (Rep. Tom Price)

Check

Retains same verification system—Page 41 of Ways and Means bill

Federal bailouts for health insurers

Check

Sections 1341-42, Page 124

Check

Page 45 of Energy and Commerce bill

Medicaid expansion to able-bodied adults

Check

Section 2001, Page 198

Check

Page 5 of Energy and Commerce bill

Federal control of insurance markets
  • Pre-existing conditions

Check

Section 1201(1), Page 64

Check

Page 61 of Energy and Commerce bill

  • Insurance Exchanges

Check

Section 1311, Page 88

Check

RETAINED

  • 26-year-old mandate

Check

Section 1001(1), Page 34

Check

RETAINED

  • Essential health benefits

Check

Section 1302(b), Page 78

Check

RETAINED

  • Medical loss ratios

Check

Section 1001(1), Page 40

Check

RETAINED

  • Annual/lifetime limits

Check

Section 1001(1), Page 33

Check

RETAINED

  • Prevention and contraception mandate

Check

Section 1001(1), Page 33

Check

RETAINED

  • Actuarial value

Check

Section 1302(d), Page 82

X

Repealed in 2020—Page 65 of Energy and Commerce bill

 

How A Meghan Trainor Song Explains the Obamacare Debate

Meghan Trainor may not be known as a policy wonk, but her lyrics could prove surprisingly useful for health care analysts. In constructing an Obamacare alternative, the debate really is all about that base—or, to be more specific, multiple baselines.

Despite the lyrics to Trainor’s famous hit, the intersection of those baselines—the coverage and fiscal baselines, along with the beliefs of the Republican Party base—has caused “treble” in replacing the health law.

Health Insurance Versus Health Care Prices

The first baseline—and the one currently driving the discussion—involves the number of Americans with health insurance. Right now, many Republicans believe they must try to extend coverage to the 20 million individuals Obamacare has supposedly provided with insurance.

Of course, some of those Americans—such as yours truly—had lost their prior coverage and were forced to buy exchange policies, or obtained coverage through Obamacare’s mandate for coverage of young adults under age 26, a provision ancillary to the law’s main entitlements. Moreover, other studies suggest the 20 million number is both inflated and driven largely by Obamacare’s massive expansion of Medicaid, not individuals purchasing policies on state insurance exchanges.

The alternative to Obamacare released by America Next nearly three years ago, which I helped draft, decided to focus on what bothers Americans most about the health care system: rising costs. Any Republican alternative to Obamacare that excludes an individual mandate or employer mandate likely will not cover as many individuals as Obamacare, perhaps by a good number. That’s one reason the America Next plan centered on controlling health costs, not implementing a coverage expansion designed to compete with Obamacare.

Although conservatives would historically focus on how their policies will lower health costs, right now many Republicans appear fixated on chasing coverage numbers. House Speaker Paul Ryan and Health and Human Services Secretary Tom Price both support refundable, advanceable tax credits, a policy Ryan has supported for many years. While incorporating a refundable tax credit into an Obamacare alternative will result in more Americans with health coverage—mitigating the first baseline issue—it could have other ramifications.

The Tax and Spend Baseline

The second baseline to consider when talking about Obamacare alternatives is the tax and spending baseline. If a replacement plan pre-supposes repeal of the law, should an alternative be viewed as raising or lowering taxes and spending relative to what existed with the law, or relative to what existed prior to the law?

For instance, the Congressional Budget Office estimated in 2015 that Obamacare will raise nearly $1.2 trillion in taxes over a decade. If an alternative to Obamacare would change that $1.2 trillion number to $800 billion, should that be viewed as a $400 billion tax cut relative to Obamacare itself, or a $800 billion tax increase, because Obamacare should be assumed as fully repealed?

Then There’s the Republican Base

On this front, the third base involved in this discussion, the Republican political base, has made its voice clear. Asked in a March 2014 poll conducted by America Next whether “any replacement of Obamacare must repeal all of the Obamacare taxes and not just replace them with other taxes,” 55 percent of the general public agreed. More concerning for Republican members of Congress, self-identified Republicans and conservatives agreed by much larger margins, approaching three to one. They would view any attempt to leave some of the law’s taxes or spending intact as inconsistent with pledges to repeal the law entirely.

Therein lies Republicans’ dilemma. Some Republicans believe that any credible Obamacare alternative must offer some insurance subsidy to those newly covered by the law. Several Republican alternatives already released would re-direct the funds raised by the law—whether through taxes, spending, or both—to finance new subsidy options.

However, based on the polling available, Republican voters disagree with this strategy. With Obamacare little discussed during the presidential campaign, and President Trump sending decidedly un-conservative signals about his policy priorities, Tea Party supporters may be more than a little surprised if an alternative to the law ends up retaining chunks of its spending and taxes.

This interplay among the base of new insureds, the spending and tax baselines, and the beliefs of the conservative base will define the House Republican alternative to Obamacare, and the legislative debate that continues to unfold. Meghan Trainor may never serve as a Washington policy analyst, but her mantra that it’s all about that base will ring true in the debate surrounding Obamacare.

This post was originally published at The Federalist.

How HHS’ Proposed Rule Would Slightly Improve Obamacare

This morning, the Department of Health and Human Services (HHS) released a rule proposing several changes to Obamacare insurance offerings. The regulations are intended to help stabilize insurance markets and hopefully pave the way for a repeal and transition away from Obamacare.

Worth noting before discussing its specifics: The rule provides a period of notice-and-comment (albeit a shortened one) for individuals who wish to weigh in on its proposals. This decision to elicit feedback compares favorably to the Obama administration, which rushed out its 2018 Notice of Benefit and Payment Parameters without prior public comment during the “lame duck” post-election period. Because the Obama administration wanted that regulation to take effect before January 20—so President Trump could not withdraw the regulation upon taking office—HHS declined to allow the public an opportunity to weigh in before the rules went into effect.

Today’s proposed rule contains reforms designed to bring relief and stability to insurance markets:

  • A shortening of next year’s open enrollment period from three months to six weeks—a solution included in my report on ways the new administration can mitigate the effects of Obamacare. In theory, the rule could (and perhaps should) have proposed an even shorter open enrollment window, to prevent individuals from signing up after they develop health conditions.
  • A requirement for pre-enrollment verification of all special enrollment periods for people signing up on the federal exchange, healthcare.gov—again outlined in my report, and again to cut down on reports that individuals are signing up for coverage outside the annual open enrollment period, incurring costly expenses, then dropping coverage.
  • Permitting insurers to require individuals who have unpaid premium bills to pay their debts before enrolling in coverage—an attempt to stop the gaming of Obamacare’s 90-day “grace period” provision, which a sizable proportion of enrollees have used to avoid paying their premiums for up to three months.
  • Increasing the permitted range of actuarial value variation—also outlined in my report—to give insurers greater flexibility.
  • Additional flexibility on network adequacy requirements, both devolving enforcement to states and allowing insurers greater flexibility in those requirements. Some might find this change ironic—critics of Obamacare have complained about narrow physician networks, and this change will allow insurers to narrow them even further. Yet the problem with Obamacare and physician access is that insurers have been forced to narrow networks. The law’s new benefit mandates have made increasing deductibles, or cutting provider reimbursements, the only two realistic ways of controlling costs. Unless and until those statutory benefit requirements are repealed, those incentives will remain.

One key question is whether these changes by themselves will be enough to stabilize markets, and keep carriers offering coverage in 2018. Given that Aetna CEO Mark Bertolini this morning called Obamacare in a “death spiral,” and Humana announced yesterday it will exit all exchanges next year, that effect is not certain.

As my report last month outlined, the new administration can go further with regulatory relief for carriers, from further narrowing open enrollment, to reducing exchange user fees charged to insurers (and ultimately enrollees), to providing flexibility on medical loss ratio and essential benefits requirements, to withdrawing mandates to provide contraception coverage. All these changes would further improve the environment for insurers, and could induce more to remain in exchanges for 2018.

However, as my post this morning noted, the ultimate action lies with Congress. The Trump administration, and HHS under new Secretary Tom Price, have started to lay a foundation providing relief from Obamacare. Now it’s time for the legislature to take action, and deliver on their promise to the American people to repeal Obamacare.

This post was originally published at The Federalist.

How to Repeal Obamacare–And What Comes Next

Secretary of Health and Human Services Tom Price’s confirmation early Friday morning marks both an end and a beginning. While his installation after a bitter nomination battle formally begins the Trump administration’s work on healthcare, Price will also seek to bring about the end of former President Barack Obama’s unpopular and unaffordable healthcare law.

Dismantling Obamacare should be a three-fold process, involving coordination among HHS, the rest of the administration, and the Republican-led Congress. The steps can occur concurrently, but all must take place to prevent people from suffering any further from Obamacare’s ill effects.

Having assumed his post, Price should use the regulatory apparatus at his disposal to bring immediate relief from Obamacare. Press reports indicate the administration has already taken steps in that regard, sending a package of insurance stabilization rules to the Office of Management and Budget for clearance prior to their release, potentially as soon as Friday afternoon.

The reports suggest the administration is considering many of the proposals to provide regulatory flexibility that I included in a report analyzing repeal last month. Specifically, the administration may reduce the length of the annual open enrollment period and require verification of individuals seeking special enrollment periods outside of open enrollment. These are two critical steps to prevent individuals from signing up for insurance after they become sick.

The administration is also considering additional flexibility with regards to Obamacare’s benefit mandates, allowing additional variation in the expected percentage of health costs plans cover, for instance.

In many cases, the administration and Price have significant latitude to provide flexibility, but that latitude is not unlimited. Until Congress acts, Obamacare remains on the statute books. While regulators can reinterpret the law, they cannot ignore it. Already, the liberal-leaning AARP has threatened legal action over one of the new administration’s rumored regulatory changes.

These legal constraints illustrate why Congress should act, preferably sooner rather than later, in passing legislation repealing Obamacare. Congress should use as the basis for action the repeal bill it passed in the fall of 2015, which Obama vetoed early last year. That bill repealed all of the law’s tax increases, and sunset the law’s coverage expansions after a two-year period to allow for an appropriate transition.

While the 2015 legislation should represent the initial template for Obamacare’s repeal, Congress can and should go further. Legislators should also seek to repeal the law’s insurance regulations, which have raised premiums and caused millions to receive cancellation notices.

Although some assume Congress cannot repeal the regulations using budget reconciliation — the special process that allows legislation to pass with a 51-vote majority, rather than the usual 60 votes, in the Senate — that may not be accurate. The Congressional Budget Office and others have made estimates showing the significant budgetary impact of these costly regulations. Republicans should use those cost estimates, and past Senate precedent, to enact repeal of the major insurance provisions using the special budget reconciliation procedures.

While adding repeal of the insurance regulations to the 2015 measure, Congress should also ease the transition away from Obamacare by freezing enrollment in the law’s new entitlements upon enactment of the repeal bill. It makes no sense to allow millions of individuals to continue enrolling in a program Congress has just voted to end. Especially with respect to the law’s massive expansion of Medicaid to the able-bodied, freezing enrollment would allow individuals currently on Obamacare to retain their coverage, while starting a process to transition away from the law’s spending and allow individuals to transition off the rolls and into employer-based coverage.

When thinking about a post-Obamacare world, Congress and the new administration should have three priorities: lowering costs, lowering costs and lowering costs.

Americans of all political stripes view lowering health costs as their number-one priority, and it isn’t even close. While candidate Obama promised in 2008 that his health plan would lower costs by an average $2,500 per family per year, the bill he signed into law instead raised costs and premiums for millions.

The answer to the top health concern lies not in new spending and taxes to subsidize health insurance (the failed Obamacare formula) but in reducing the underlying costs of care.

Reducing costs involves equalizing the tax treatment of health insurance, limiting current tax preferences that encourage over-consumption of health insurance and health care. But this must be done in a way that does not raise tax burdens overall. Lowering costs should include incentives for wellness and promote health savings accounts, the expansion of which could reduce health expenditures by billions of dollars.

States have a big role to play in the health debate, both in lowering costs and protecting individuals with pre-existing conditions.

Congress can and should provide states with incentives to reduce insurance benefit mandates that drive up the cost of care. Congress should guarantee that individuals with pre-existing conditions have access to coverage, but give states funding, and let them decide the best route — whether through high-risk pools, or some other risk transfer mechanism — to ensure access to care. While not the panacea President Trump and others have claimed, Congress should allow individuals to shop across state lines for the coverage that best suits their needs.

These changes will not require a 2,700-page piece of legislation like Obamacare. They should not even be considered a “replacement” for Obamacare. But they would have an impact in reducing health costs, the issue Americans care most about. They would represent a new beginning after the canceled policies and premium spikes associated with Obamacare.

 This post was originally published in the Washington Examiner.

Reforming Medicaid, Beginning on Day One

A recent article listing five ways in which Health and Human Services Secretary-designee Tom Price could reform health care surprisingly excluded solutions for our nation’s largest taxpayer-funded health care program—Medicaid. That’s right: While Medicare spends more federal dollars, state and federal taxpayers spend more on Medicaid overall. With federal program spending scheduled to top $400 billion next fiscal year, and Medicaid consuming a large and growing share of state budgets, Dr. Price should waste no time making critically important reforms.

Ultimately, conservatives should work to convert Medicaid into either a block grant or per capita cap, where states would receive fixed payments from the federal government in exchange for additional flexibility to manage their programs as they see fit. While Congress must approve the legislative changes necessary to create a block grant or per capita cap, Dr. Price and Centers for Medicare and Medicaid Services Administrator-designee Seema Verma—who has a great deal of experience managing state Medicaid programs—can take steps, beginning on Day One, to give states more flexibility and freedom to experiment.

The prime place for Price and Verma to start lies in Medicaid’s “1115 waivers,” so named for the section of the Social Security Act (Section 1115) that created them. Under the 1115 process, HHS can waive certain requirements under Medicaid and the State Children’s Health Insurance Program (SCHIP) for “any experimental, pilot, or demonstration project which, in the judgment of the Secretary, is likely to assist in promoting the objectives” of the programs.

Unfortunately, such waiver authority is only as effective as the Administration that chooses to exercise it—or not, as has been the case for much of the last eight years. One section of Obamacare actually increased the bureaucracy associated with 1115 waivers, requiring states to undertake a lengthy process, including a series of hearings, before applying for a waiver (because Obamacare itself was written in such a transparent manner). Subsequent legislative changes have sought to streamline the process for states requesting extensions of waivers already granted.

However, Dr. Price and Ms. Verma can go further in allowing states to reform Medicaid. They can, and should, upon taking office immediately propose a template waiver application for states to utilize. They can also publicly indicate their intent to approve blanket waivers—that is, waiver applications meeting a series of policy parameters will be automatically approved. While Congress should ultimately codify state flexibility into law—so no future Administration can deny states the ability to implement needed reforms—the new Administration can put it into practice while waiting for Congress to act.

As to the types of waivers the Trump Administration should look favorably upon, House Republicans’ “Better Way” proposal and a report issued by Republican governors in 2011 provide two good sources of ideas:

Work Requirements: Despite repeated requests, the Obama Administration has steadfastly refused to allow states to impose a requirement that able-bodied Medicaid beneficiaries either work, look for work, or prepare for work through enrollment in job-training programs. Because voluntary job-referral programs have led to impressive success stories, states should have the ability to impose work requirements for Medicaid recipients.

Cost-Sharing and Benefit Design: Whether through enforceable yet reasonable premiums, modest co-payments, Health Savings Account-like mechanisms, or a combination of all three, states should have greater freedom to utilize consumer-directed health care options for beneficiaries. These innovations would not only turn Medicaid into a product more closely resembling other forms of health insurance, they can also help reduce costs—thus saving taxpayers money.

Premium Assistance and Wellness Incentives: Current regulatory requirements for premium assistance—in which Medicaid pays part of the cost associated with an eligible individual’s employer-based insurance—have proven ineffective and unduly burdensome. States should have more flexibility to use Medicaid dollars to subsidize employer coverage, without providing additional wrap-around benefits. Likewise, states should have the ability to offer incentives for wellness and healthy behaviors in their Medicaid programs, just as successful employers like Safeway have done.

Payment Reforms and Managed Care: With health care moving away from a fee-for-service model, in which doctors and hospitals get paid for each service performed, states should have the ability to innovate. Some may wish to implement bundled payments, which would see Medicaid providing a lump-sum payment for all the costs of a procedure (e.g., a hip replacement and associated post-operative therapy). Others may benefit from a waiver of the current requirement that Medicaid beneficiaries have the choice of at least two managed care plans—a requirement that may not be feasible in heavily rural areas and states.

Program Integrity: With fraud endemic in federal health care programs, states should receive flexibility to track down on scofflaws—for instance, the ability to hire contingency fee-based contractors, and more scrupulously verify beneficiary eligibility and identity. By monitoring suspicious behavior patterns through the use of “big data,” these efforts could save both Washington and the states billions.

Reforming a program that will cost state and federal taxpayers an estimated $607.2 billion this fiscal year will not be easy, and will not happen overnight. But the sprawling program’s vast size and scope also demonstrate why the new Administration should start its work immediately. While Congress can and should fundamentally reform Medicaid, HHS can use blanket 1115 waivers to allow states to experiment as soon as they can. In this way, the “laboratories of democracy” can drive the innovation needed to bring Medicaid into the 21st century, lowering health costs and saving taxpayers money.

Fact Checking Politico’s Hit Piece on Tom Price

Earlier this evening, Politico released an “article” discussing “Tom Price’s Radically Conservative Vision for American Health Care.” The piece’s first sentence claimed that “gutting Obamacare might be the least controversial part of Tom Price’s health care agenda”—a loaded introduction if ever there were one. The article goes on to quote seven separate liberal analysts—including the President of Planned Parenthood—while not including a single substantive Republican quote until the very last paragraph of a 27-paragraph piece.

Given this opinion piece masquerading as “journalism,” it’s worth pointing out several important facts, falsehoods, and omissions in the Politico story:

CLAIM:           Republicans “may look beyond repealing and replacing Obamacare to try to scale back Medicare and Medicaid, popular entitlements that cover roughly 130 million people, many of whom are sick, poor, and vulnerable.”

FACT:                         It’s ironic that the Politico reporters suddenly care about the “sick, poor, and vulnerable.” I’ve been writing about how Obamacare encourages discrimination against the vulnerable literally for years—including a few short weeks ago. If any Politico reporters have written on how Obamacare encourages states to expand Medicaid to able-bodied adults rather than to cover individuals with disabilities, I have yet to read those articles.

This week came a report that no fewer than 752 individuals with disabilities have died—yes, died—while on waiting lists to receive Medicaid services since that state expanded coverage under Obamacare to able-bodied adults. If the Politico reporters—much less the liberal advocates the reporters interviewed for the article—care so much about the “sick, poor, and vulnerable,” when will they cover this Obamacare-induced tragedy?

CLAIM:           “Price…has proposed policies that are more conservative than those of many House Republican colleagues.”

FACT:                         Dr. Price’s Fiscal Year 2016 budget—which included provisions related to Obamacare repeal, premium support for Medicare, and block grants for Medicaid—passed the House with 228 votes. How can Politico claim that Dr. Price’s policies “are more conservative than those of many House Republican colleagues,” when over 93% of them publicly endorsed his vision?

CLAIM:           “The vast majority of the 20 million people now covered under Obamacare would have far less robust coverage—if they got anything at all.”

FACT:                         This claim presupposes 1) that all individuals covered under Obamacare want to buy health coverage, and 2) that they want to buy the type of health coverage Obamacare forces them to purchase. It ignores the fact that premiums increased by thousands of dollars in 2014 because individuals were forced to buy richer coverage.

It also ignores the fact that nearly 8 million individuals have paid the tax penalty associated with not buying Obamacare-compliant health coverage—because they cannot afford it, do not want it, or both—and another 12.4 million have requested exemptions from the Obamacare mandate. Depending on the degree of overlap between individuals who paid the mandate tax penalty and individuals who claimed exemptions, the number of Obamacare refuseniks could actually exceed the number of individuals newly covered under the law.

Instead, this claim comes at the question of insurance coverage from President Obama’s liberal, paternalistic perspective. When millions of people started receiving Obamacare-related cancellation notices in the mail, the President gave a speech stating how all those plans were “substandard:” “A lot of people thought they were buying coverage, and it turned out not to be so good.” In other words, “If you liked your plan, you’re an idiot.”

CLAIM:           “Price also supports privatizing Medicare…”

FACT:                         The premium support plan included in the House Republican budget includes 1) a federal contribution that increases every year to fund 2) a federally-regulated plan with 3) federally-mandated benefits and 4) the option to continue in government-run Medicare if beneficiaries so choose. Which of these four points would the Politico reporters deem “privatizing?”

CLAIM:           “…an approach that Democrats lambaste as a voucher system…”

FACT:                         That claim is both ironic and hypocritical coming from Democrats, as a version of premium support endorsed by House Speaker Ryan and Senate Finance Committee Ranking Member Ron Wyden in 2011 would have utilized the exact same bidding mechanism as Obamacare itself. Do Democrats “lambaste” Obamacare’s Exchanges as a “voucher system?” Interestingly enough, the Politico reporters neither note this irony, nor apparently bothered to ask the question.

CLAIM:           “…that would gut a 50-year-old social contract and shift a growing share of health care costs onto seniors.”

FACT:                         The form of premium support endorsed by Rep. Price in this year’s House Republican budget would, according to a September 2013 analysis from the Congressional Budget Office (CBO), save both the federal government and seniors money. And don’t take my word for it—here’s a quote from the CBO paper:

CBO’s analysis implies that beneficiaries’ total payments would be about 6 percent lower, on average, under the average-bid option than under current law. That reduction results from the combination of the lower average premiums paid above and a reduction in average out-of-pocket costs, which would result primarily from higher enrollment in lower-bidding private plans.

Where exactly among the highlighted phrases did the Politico reporters get the idea that premium support will “shift a growing share of health care costs onto seniors?”

CLAIM:           “Price also wants to limit federal Medicaid spending to give states a lump sum, or block grant, and more control over how they could use it—a dream of conservative Republicans for years, and a nightmare for advocates for the poor who fear that many would lose coverage.”

FACT:                         A block grant would increase federal spending on Medicaid annually—just by slightly less than prior estimates. Only in Washington could granting a program a three percent increase rather than a five percent increase classify as a “cut.”

Having provided actual facts to rebut the piece’s nonsensical claims, I’ll offer some free advice: If the folks on Politico’s payroll want to publish liberal talking points unchallenged, they should quit their jobs, go out on their own, and do what I do for a living. I’m all for a free press, and freedom of speech, but passing opinion—and one-sided opinion at that—as “journalism” does a disservice to the name.

The Price Nomination and the Road Ahead

In announcing the nomination of Georgia orthopedic surgeon and congressman Tom Price as Health and Human Services secretary, Donald Trump sent an important signal about his incoming administration’s desire to undertake major efforts to repeal and replace Obamacare, along with other entitlement reforms. However, Price’s nomination also illustrates why those efforts face a difficult road to passage and enactment.

As news of the Price appointment leaked out late on Monday evening, reporters spent much of their time breathlessly analyzing Dr. Price’s health-care legislation—H.R. 2300, the Empowering Patients First Act—for clues as to what it might mean for the replace effort. However, Price’s bill may be more noteworthy for what it does not include than what it does:

  • Any premium support plan for Medicare reform;
  • Any reform of Medicaid—whether block grants or per capita caps; and
  • Any spending reductions to fund the refundable portion of tax credits Price proposes as an alternative to Obamacare’s insurance subsidies.

In other words, despite releasing a 243-page health-care bill, Price hasn’t articulated his positions on many, if not most, of the important health-care issues the Republican Congress will face next year. For instance:

  • How should a premium support system under Medicare be structured? Should payments to seniors be based upon the average plan bid, the lowest plan bid, or another formula? How quickly should those payments rise in future years?
  • How quickly should Medicaid block grants, or per capita caps, rise in future years?
  • Should an Obamacare repeal-and-replace plan rely on pre-Obamacare levels of taxes and spending, or should it redirect existing Obamacare spending in a different direction?

Price’s legislative efforts are entirely silent on these and other critically important questions that Congress will need to undertake next year.

Budget Gimmicks and Magic Asterisks

As chairman of the House Budget Committee, Price earlier this year released a budget blueprint that did include some ideas for entitlement reform. However, that document included only about four pages of proposals on Medicare, Medicaid, and Obamacare—some of which focused more on making the case against Obamacare than outlining the specifics of a Republican alternative.

More importantly, even though the Republican budget document said it “gets rid of all of Obamacare,” that’s not what it did. The budget, like those issued by House Speaker Paul Ryan when he was Budget Committee chairman, assumes Obamacare’s higher levels of taxes and lower levels of Medicare spending to achieve balance within the decade. Either the budget doesn’t repeal all of Obamacare, or it assumes that Congress, after repealing Obamacare, would go back and re-enact equivalent levels of tax increases and Medicare spending reductions.

It’s particularly noteworthy that Price’s Empowering Patients First Act, which proposes a new refundable tax credit, includes only one idea to pay for said credit—a cap on the tax deductibility of employer-sponsored health coverage. Although administered through the tax code, refundable credits are considered for budgetary purposes government spending—Washington writing “refund” checks to individuals and families with no income tax liability.

While it’s difficult to determine without a Congressional Budget Office score to his bill, one could argue the chairman of the House Budget Committee proposed raising taxes (the cap on deducting employer-sponsored health coverage) to pay for new spending (the refundable portion of the tax credit/insurance subsidy).

None of these omissions by Price suggest he lacks an intricate knowledge of health policy—far from it. In fact, to the extent Price has purposefully avoided many of the political minefields omnipresent in health policy, that public silence makes his Senate confirmation more likely.

But it also illustrates the extent of the obstacles Republicans face. If one of the few conservatives in Congress with an interest in, and knowledge of, health care achieved that reputation in part by avoiding tough choices, what will Republicans do when they have to make those difficult decisions—and trust me, they will have to—without him next year?

Legislating vs. Implementing

As chair of the House Budget Committee, and with a seat on the House Ways and Means Committee, Price would have been uniquely placed to influence a legislative debate on health care in the 115th Congress. Most of the legislative proposals—whether to repeal and replace Obamacare, or reform entitlements—will likely occur through the budget reconciliation process, where the chairs of the House and Senate Budget Committees play a key role. Price was listed as the official sponsor of the reconciliation bill repealing Obamacare that President Obama vetoed earlier this year; his name would have similarly been on any repeal bill considered under reconciliation in 2017.

Given his influential perch in Congress, Price did not accept the HHS nomination because he intends to oversee the legislative process at a close distance. He will play a key role in liaising with Congress, no doubt, but perhaps more from a “big picture” perspective—working to persuade his former legislative colleagues—than by drafting minute details with Hill staff, Ryan, and Senate Majority Leader Mitch McConnell.

Price’s nomination to HHS makes much more sense from an implementation standpoint—the opportunity to shape and mold the regulatory process. Price can lay the regulatory groundwork for repealing Obamacare and reforming entitlements. But the heavy lifting of policy will remain Congress’s purview, and Price’s record—both what it includes, and more importantly, what it excludes—illustrates that lift will be heavy indeed.

This post was originally published at The Federalist.

Three Lessons from Last Year’s Obamacare Repeal Effort

In a move virtually ignored outside Washington and largely unnoticed even within it, last December the House and Senate passed legislation repealing much of Obamacare. President Obama promptly vetoed the measure — an obstacle that will disappear come January 20. As reporters and policymakers attempt to catch up and learn the details of a process they had not closely followed, three important lessons stand out from last year’s “dry run” at repealing Obamacare.

The Senate Should Take the Lead

The legislation in question, H.R. 3762, made it to President Obama’s desk only because Republicans used a special procedure called budget reconciliation to circumvent the Senate’s 60-vote requirement to overcome a Democratic filibuster. While reconciliation allowed the bill to make it to the president’s desk, it came with several procedural strings in the Senate. Reconciliation legislation may only consider provisions that are primarily budgetary in nature; policy changes, or policy changes with an incidental fiscal impact, will get stripped from the bill. In addition, reconciliation legislation may not increase the budget deficit.

Unfortunately, the original version of the bill the House introduced did not comply with the Senate requirements. The legislation repealed Obamacare’s Independent Payment Advisory Board (IPAB) — but because that change was primarily policy-related and not fiscal in nature, it did not pass muster with the Senate parliamentarian. Likewise, according to a cost estimate by the Congressional Budget Office, the House-passed bill would have increased the deficit in the “out years” beyond the ten-year budget window, making it subject to another point-of-order challenge that would require 60 votes to overcome. Ultimately, the legislation contained enough of these procedural flaws that Senate majority leader Mitch McConnell had to introduce a completely new substitute for the bill as it came to the Senate floor, to ensure that it would receive the procedural protections accorded to a reconciliation measure.

The arcane and technical nature of the budget-reconciliation process means that the Senate will play the key role in determining what passes — simply because Senate procedure will dictate what can pass. While the House has the constitutional prerogative to originate all tax legislation, and by custom it initiates most major spending legislation, the Senate may do well to initiate action in this particular case. House Republicans proposed an Obamacare-replacement plan earlier this year, Paul Ryan’s “A Better Way,” but what good is passing that through the House if much of it ends up on the Senate’s proverbial cutting-room floor?

Personnel Matters, Because Institutional Memory Is Scarce

The original reconciliation bill was introduced in the House on October 16, during what amounted to an interval between leaders. John Boehner had announced his intention to resign the speakership, but Paul Ryan had not yet assumed that title. And while House members played another round of “musical chairs,” staff underwent their own turnover, as Speaker Boehner’s longtime health-policy adviser departed Capitol Hill a few weeks before Boehner announced his surprise resignation.

To say that relevant leaders and committee chairs have swapped places in the House recently is putting it mildly. Not one has served in his current post for more than two years. Two years ago, Paul Ryan chaired the House Budget Committee; his reign at Ways and Means lasted a brief nine months before he assumed the speakership. Elsewhere in leadership, both Majority Leader Kevin McCarthy and Majority Whip Steve Scalise assumed their jobs after the defeat of Eric Cantor in August 2014. At the committees, Budget Committee chairman Tom Price and Ways and Means Committee chairman Kevin Brady succeeded Paul Ryan in leading their respective committees last year. And the Energy and Commerce and Education and Workforce Committees will soon choose new chairmen to assume their gavels in January.

While Senate leadership has remained more stable at the member level, most of the staff in both chambers has turned over since the Obamacare debate of 2009–10. I served in House leadership during 2009, and Senate leadership from 2010 to 2012; most of my former colleagues have long since moved on, whether to lobbying jobs, grad school, or even outside Washington altogether. Both at the member level and the staff level, the critically important institutional knowledge of what happened to Democrats — and when, why, and how — during the Obamacare debacle eight short years ago is dangerously thin.

The Washington gossip circles seem most interested in playing the parlor game of who will fill what post in the new administration. But particularly if the administration defers to Capitol Hill on policy, the true action in determining what happens to Obamacare — and what replaces it — may well lie at the other end of Pennsylvania Avenue. Both reporters and would-be job applicants should react and plan accordingly.

An Influential Troika of Senate Conservatives

In addition to its procedural shortfalls, the original House reconciliation bill represented something much less than full repeal of Obamacare. While the law as enacted contains 419 sections, four of which had already been repealed prior to last October, the House’s reconciliation bill repealed just seven of them. Admittedly, much of Obamacare contains extraneous provisions unrelated to the law’s coverage expansions: nursing-home regulations, loan-forgiveness programs, and the like. But the original House reconciliation bill left intact many of Obamacare’s tax increases and all of its coverage expansions, leaving it far short of anything that could be called full repeal.

Into the breach stepped three conservative senators: Mike Lee, Marco Rubio, and Ted Cruz. The day before the House voted to pass its reconciliation bill, they issued a joint statement calling it thin gruel indeed:

On Friday the House of Representatives is set to vote on a reconciliation bill that repeals only parts of Obamacare. This simply isn’t good enough. Each of us campaigned on a promise to fully repeal Obamacare, and a reconciliation bill is the best way to send such legislation to President Obama’s desk. If this bill cannot be amended so that it fully repeals Obamacare pursuant to Senate rules, we cannot support this bill. With millions of Americans now getting health premium increase notices in the mail, we owe our constituents nothing less.

Knowing that the bill lacked the votes to pass the chamber without support from the three conservatives, Senate leadership significantly broadened the bill’s scope. The revised version that went to the president’s desk repealed all of the law’s tax increases and all of its coverage expansions. It was not a one-sentence repeal bill that eradicated all of Obamacare from the statute books, but it came much closer to “fully repeal[ing] Obamacare pursuant to Senate rules,” as the three senators laid out in their statement.

The conservatives’ mettle will be tested once again. Already, Republican congressional sources are telling reporters that they intend to keep the law’s Medicaid expansion, albeit in a different fashion. “One of the aides said this version of the bill [that passed last year] was mostly about ‘messaging,’ and that this time, ‘We’re not going to use that package. We’re not dumb.’”

Apart from the wisdom of calling a bill that their bosses voted for less than one year ago “dumb,” the comment clarifies the obvious fissure points that will emerge in the coming weeks. Will conservatives such as Lee, Rubio, and Cruz hold out for legislation mirroring last year’s bill — and vote no if they do not receive it? Conversely, what Republican who voted for the reconciliation bill last year will object if it returns to the Senate floor? Will senators be willing to vote against something in 2017 that they voted for in 2015?

As I noted last week, Republicans’ path on Obamacare could prove more complicated than the new conventional wisdom in Washington suggests. If past is prologue, last year’s reconciliation bill provides one possible roadmap for how the congressional debate may play out.

This post was originally published at National Review.