On the campaign trail, candidate Donald Trump pledged to repeal and replace Obamacare and shift Medicaid to state block grants. But he also vowed not to cut Medicare—the bedrock senior citizen healthcare program that Democrats and conservatives in Congress have sparred over for years.
Last week, the president-elect moved aggressively to follow through on those pledges on Obamacare and Medicaid by choosing Georgia Rep. Tom Price, an orthopedic surgeon and active opponent of the Affordable Care Act, to run HHS and its $1 trillion budget. He also chose healthcare consultant Seema Verma, who engineered the “personal responsibility” approach in Indiana's Medicaid expansion plan, to run the CMS.
With Democratic senators—led by new Senate Minority Leader Sen. Chuck Schumer of New York—pledging an all-out fight against any attempt to force future seniors to accept premium support or vouchers to purchase their Medicare plans, Republican leaders on Capitol Hill are already moving to take the issue off the table. Sen. Lamar Alexander (R-Tenn.), chairman of the upper chamber's Health, Education, Labor and Pensions Committee, told the news website TPM that taking on Medicare in the first year of the 115th Congress that gets underway in January “would fall in the category of biting off more than we can chew.”
Instead, Price and Verma will get maximum support from the Republican-controlled Congress and the White House to move quickly to repeal the ACA and give states more control over Medicaid. “Together, Chairman Price and Seema Verma are the dream team that will transform our healthcare system for the benefit of all Americans,” Trump said in a statement.
Repealing Obamacare is likely to occur within the first 100 days of the new administration. But while the exact shape of the repeal legislation remains an open question, implementation will probably be postponed for two or three years to give the Republican majority time to craft a replacement.
However, that will leave the new administration and the Republican-led Congress with the problem of dealing with the flaws in the current exchange marketplaces—at least if they expect insurers to continue selling plans until a replacement plan is crafted.
Price, a strong advocate for private physicians and their specialty societies, is well-positioned to recruit and deploy the small army of experts at HHS needed to help Congress craft replacement legislation. He has intimate knowledge of the nuts and bolts of healthcare legislation since he chaired the House Budget Committee and served on the Health Subcommittee of the House Ways and Means Committee.
In 2014, he authored the Empowering Patients First Act, which would give Americans without employer-based health insurance age-adjusted tax credits to buy private insurance plans. The bill also set up expanded health savings accounts and high-risk pools in the states and would allow people to opt out of Medicare, Medicaid or Veterans Affairs benefits and instead give them a tax credit to buy individual plans.
While the legislation received widespread support from Republicans, it was roundly criticized by Democrats, who say it would turn the health insurance system into one based largely on catastrophic plans. However, such an approach could draw a few Democratic votes from conservative states—unlike the ACA, which passed without a single Republican vote. That could give Republicans bipartisan cover and insulate them from charges they rammed the approach through Congress.
Healthcare experts on the center and left of the political spectrum say such a plan, unless generously funded, would fail to keep pace with inflation and ultimately ratchet up out-of-pocket costs through higher co-pays and deductibles. High-risk pools, which were used widely before passage of the ACA and generally considered a failure, would also require massive subsidies to work. The legislation was never scored by the Congressional Budget Office.
Democrats lack the power to block Price's nomination because of changes to the filibuster rules they orchestrated when controlling the Senate. But they will be able to turn his confirmation hearing into a forum for highlighting the successes of Obamacare, the possible rollbacks in women's reproductive health rights and to continue raising possible changes in Medicare.
“Congressman Price has proven to be far out of the mainstream of what Americans want when it comes to Medicare, the Affordable Care Act and Planned Parenthood,” Schumer said. “Thanks to those three programs, millions of American seniors, families, people with disabilities and women have access to quality, affordable healthcare. Nominating Congressman Price to be the HHS secretary is akin to asking the fox to guard the hen house.”
Healthcare interests, meanwhile, quickly voiced support for Price and Verma. The American Hospital Association, American Medical Association, America's Essential Hospitals, Association of Academic Medical Colleges and America's Health Insurance Plans were among the many groups issuing statements promising to work with the new administration.
In part that's because Price has shown support for the movement toward value-based reimbursement, which healthcare interests generally support. He voted in favor of the Medicare Access and CHIP Reauthorization Act, which puts physicians on that path.
But he recently has criticized the reporting requirements in MACRA as burdensome. He's also opposed to mandatory demonstration projects from the Center for Medicare & Medicaid Innovation, which develops and pilots value-based payment models.
The Innovation Center's first mandatory bundled-payment program, which went into effect in April, involved orthopedic surgeries—his specialty. His September letter calling for the CMS to “cease all current and future planned mandatory initiatives” was co-signed by 178 other members of Congress.
The CMS has also proposed reducing physician markups on Medicare Part B drugs and adding cardiac operations to the mandatory bundled-payment program. Both will now likely be on Price's chopping block.
But some are hopeful that Price, a fiscal conservative who recognizes the need to keep Medicare costs under control, could work to expand those programs voluntarily or become an advocate for a revamped MACRA implementation scheme. “The Republicans want MACRA to succeed. It's their baby,” said Blair Childs, senior vice president at Premier, a company that offers performance-improvement services for hospitals and health systems.
What defines success could shift dramatically under Price. His Obamacare replacement bill contained sections that would give physician specialty societies a powerful say in what quality and outcomes indicators are used in value-based reimbursement.
That troubles some conflict-of-interest experts. “These physician groups are advocacy organizations that exist to serve the interests of their members, which are physicians, and those interests are often financial in nature,” said Eric Campbell, a sociologist and professor of medicine at Harvard Medical School.
Price joined Congress in 2004 after four terms in the Georgia state Senate. He worked in private practice for nearly 20 years and has taught residents at Emory School of Medicine and Grady Memorial Hospital in Atlanta.
Health professionals have been a major source of donations to Price throughout his political career. Individual and political action committees in the healthcare sector have donated more than $4.8 million to him. The American Association of Orthopaedic Surgeons is a top donor group.
—Reporting by Aurora Aguilar, Virgil Dickson and Elizabeth Whitman. The story was written by Merrill Goozner.