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March 03, 2017 11:00 PM

Editorial: It's not that complicated—an imagined memo for President Trump

Merrill Goozner
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    Goozner

    To: President Donald Trump

    From: HHS Secretary Tom Price

    Re: It's complicated

    Dear Mr. President,

    You face some difficult choices in helping Congress come up with a replacement for the disastrous Obamacare. This memo is designed to alert you to the complications in the approaches you've now endorsed.

    First, let's identify who we're talking about. The ACA doesn't affect about 280 million people who get health insurance through their employers, Medicare, traditional Medicaid, the Children's Health Insurance Program, the military or the Veterans Affairs Department.

    It only provides access to health insurance for able-bodied, working adults whose employers don't provide them with health coverage, people between jobs or the self-employed and under-employed. Most who buy plans on the exchanges are subsidized on a sliding scale up to four times the poverty level.

    We're not talking about workers at your Trump-branded hotels, at least the ones with union contracts like the pact just signed in Las Vegas, whose very low co-pays and deductibles had one analyst calling it a “Cadillac plan.” We're talking about businesses like some of the franchisees of CKE Restaurants, which operates Hardee's, Carl's Jr. and other fast-food chains.

    BTW, that company is owned by your initial choice for labor secretary, Andrew Puzder. About 73% of Puzder's nearly 4,000 restaurants are owned by franchisees, and unless they have over 50 employees, they are not required to provide their workers with health insurance, even under the ACA.

    In your wonderful speech to a joint session of Congress last week, you outlined five principles for any plan to “save Americans from this imploding Obamacare disaster.” So glad you approved most of the proposals in my Empowering Patients First Act of 2015.

    First, you want to ensure people with pre-existing conditions are guaranteed “access” to plans. Good choice of words!

    Making those plans affordable, though, is going to be very, very expensive. Caring for these people isn't cheap. Unless we create heavily subsidized high-risk pools, or force healthy uninsured people to buy plans (not good!), that's going to be very costly insurance.

    Second, you endorsed giving everyone tax credits to buy that insurance. Great idea! Everyone gets government goodies. Suburban soccer moms and DINKs (dual-income, no kids) will love it. You can't beat those politics.

    But be careful about how you respond when naysayers attack the quality of the plans people will be able to afford. The average “silver” family plan sold on the exchanges costs about $15,000 a year. Even a $4,000 refundable tax credit will make the monthly premium huge!

    Don't let the lying press upset you with talk about poorer people getting less of a subsidy while people who previously weren't subsidized get the same entitlement. BTW, we're going to have some problems with the tea party wing, who are rebelling against replacing one entitlement with another. The GOP governors like block grants or per capita caps for Medicaid. But most of them won't go along unless we spend at least as much as we spend now.

    I loved your talking points on tort reform and bringing down drug prices. But we've got some political hurdles here. The trial lawyers and the pharmaceutical industry have influence on Capitol Hill. Some major swamp-draining is in order.

    Finally, you endorsed selling plans across state lines. This is a must if we're going to give people access to plans they can afford. I'm glad you didn't talk about high deductibles or co-pays, though, because that's exactly what they'll get unless they have an additional, say, $10,000 a year to spend out of pocket for premiums.

    You're probably asking, “So how are we going to solve all these complications to make it terrific?” No problem!

    Just repeal the income tax exclusion for employer-provided health insurance. That will raise about $250 billion a year. Call it the All-Terrain Vehicle Tax. Just don't expect any of your Fortune 500 buddies, who rely on employer-provided insurance to hold onto workers, to show up at Mar-a-Lago.

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