During the battle over Obamacare, conservatives breathlessly accused liberals of executing a radical transformation of the country’s health care system. In reality, Obamacare left insurance for the vast majority of the country untouched, while expanding access for people who had been too sick or too poor to afford insurance before.
But if Donald Trump’s selection of Congressman Tom Price as his Secretary of Health and Human Services is any indication, the real radical transformation of health care is now on its way. If you thought Obamacare was a government overreach, wait until you see what Trumpcare has in store.
As Secretary of Health and Human Services, Price would be tasked with managing and implementing the nation’s most important health care laws and programs. A physician and ardent Obamacare foe, Price has a number of ideas about changing our health insurance system.
For now, congressional Republicans are hoping to enact a “repeal and delay” of Obamacare, under the dubious presumption that stalling on actual reforms will avoid upending the health insurance industry. But sooner or later, the GOP will come under pressure from both within and without to execute its long-promised overhaul of the system. And Price’s ideas, which are well within the mainstream of Republican thought, would disrupt nearly every form of health insurance in the country, from Obamacare’s individual plans to Medicare to even employer-provided coverage.
Obamacare guaranteed certain benefits that insurers must provide and extended insurance coverage to about 20 million people through its Medicaid expansion, private marketplaces for individuals, and other coverage provisions. That’s a major accomplishment—one that has driven the uninsured rate to historic lows. But in a country of more than 320 million people, Obamacare’s supposed “government takeover” of health insurance was in fact quite modest, facilitating coverage for about 6 percent of the country.
Yet Price would do away with Obamacare entirely. As Vox’s Sarah Kliff reports, Price would replace Obamacare with a plan that “does more to benefit the young, healthy, and rich—and disadvantages the sick, old, and poor.” Obamacare’s income-based subsidies to help individuals afford health insurance would be replaced with a tax credit based on their age. The Medicaid expansion would be repealed with no clear replacement, throwing 11 million people off of their health insurance.
Like other conservatives, Price wants to block grant the rest of the Medicaid program to the states. This same technique was used in 1996 to unload welfare benefits on to the states, where the program has been allowed to shrivel away. There’s little reason to expect anything different this time. Block-granting Medicaid to the states is simply a hidden way of cutting health care for the poor. That jeopardizes health care coverage for another 11 million adults and 30 million children.
Then there’s Medicare. Just days after the election, Price told reporters that the GOP would overhaul government-run insurance for seniors within “six to eight months” of Trump taking office. Speaker Paul Ryan has also telegraphed that he hopes to use a Trump administration to fulfill his long-cherished goal of privatizing the program. As soon as this summer, Medicare as we’ve known it for 50 years could be on its way out if conservatives have their way. In its place, the GOP would cut Medicare beneficiaries a voucher payment and send them shopping on an insurance marketplace (much like those used in Obamacare). That would be a fundamental remaking of a program that currently insures nearly 40 million seniors and people with disabilities.
Price wouldn’t let private employer-sponsored insurance escape unscathed, either.
Some 150 million people—46 percent of the country—get insurance through their jobs. Since World War II, the government has encouraged employers to provide insurance by exempting the cost of employees’ premiums from taxation. So an employer owes payroll taxes on wage compensation, but can give employees insurance free of taxation.
Price would partially roll back this tax benefit. He’d limit the exemption to $8,000 for individual policies and $20,000 for families.
Economists typically support closing this tax break, believing that it diverts employee compensation toward more expensive health insurance policies. But limiting the tax break will be divisive and disruptive for workers. Their coverage could get weaker, and there’s no guarantee that employers will actually boost employees’ wages with the cost savings, rather than simply pocketing them.
Obamacare tried to chip away at the tax break for employer-based coverage with its Cadillac Tax. This would have taxed employer-based plans costing more than $10,200 in premiums per year for individuals and $27,500 for families. But the Cadillac Tax faced steady resistance—including from conservatives—and has been delayed until at least 2020.
Studies estimated that the Cadillac Tax could affect most employer-provided health plans as soon as 2029. With its lower premium thresholds, Price’s tax exclusion cap will likely affect more people’s coverage even sooner.
Even though virtually none of these ideas were debated during the presidential campaign, Trump’s new health secretary is fixing to reform the entire gamut of public and private insurance that more than 250 million Americans depend on. And Price himself has the power to unilaterally move on many of these changes. For instance, he and the administration’s legal team could refuse to defend the Obamacare provision that helps individuals pay their co-pays and deductibles, which is currently tied up in court. He could water down the benefits that insurers must offer, weakening the quality of health insurance. He could grant states Medicaid waivers to make the program more conservative and more draconian, such as requiring people to work and undergo drug testing in order to receive Medicaid coverage.
Much of the rest of Price’s agenda could be accomplished through the procedure known as budget reconciliation, which would require a bare-majority, party-line vote in each house of Congress. Reconciliation bills fast-track legislation dealing with taxing and spending, and cannot be filibustered in the Senate. Republicans could repeal most of Obamacare, privatize Medicare, and limit the employer-sponsored insurance tax exclusion all in one massive reconciliation bill.
Beyond whipping up public outrage, Democrats have little institutional power to slow the conservative agenda’s far-reaching health care changes. Barring a widespread case of cold feet in the Republican Party—a distinct possibility as they face the wrath of voters—those changes will consistently cause the quality of coverage to get worse. This is not a coincidence.
It springs from a fundamental conservative discomfort with the institution of health insurance and its intersection with government. Conservatives have a moral discomfort with insurance reducing personal responsibility by insulating people from risk. They have a fiscal discomfort with government being exposed to the cost of health care. And they have an ideological discomfort with government taxing, spending, and regulating to expand coverage. That’s why many conservatives push for an insurance system centered on high-deductible insurance that covers only the most catastrophic medical incidents, leaving individuals self-funding everything else through health savings accounts.
Regardless of where you get your health insurance, the Trump administration has major changes in mind for you. Get ready for a real radical transformation.