Donald Trump Chooses Tom Price as Health Secretary

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Price has led efforts to craft a GOP alternative to the spectacularly unpopular Affordable Care Act.

WASHINGTON— Louise Radnofsky and Peter Nicholas report: President-elect Donald Trump has chosen House Budget Committee Chairman Tom Price (R., Ga.) as his nominee for secretary of the Health and Human Services Department, according to a transition team adviser, putting the six-term congressman in charge of the sprawling agency that will likely dismantle Democrats’ 2010 health-care overhaul.

“We think it’s important that Washington not be in charge of health care. The problem that I have with Obamacare is that its premise is that Washington knows best.”

Mr. Price, a 62-year-old former orthopedic surgeon, is one of several GOP physicians who sought to carve out a leading role in shaping the party’s health policy and, in particular, the party’s alternative vision to Democrats’ Affordable Care Act. Much of his criticism of the law has centered on the authority it gives to the federal government, and to the agency that he may now head.

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“There’s a genuine desire to have us coalesce around a single plan so that the American people can see who’s trying to solve these challenges. I wouldn’t draw any lines in the sand other than that the path that we’re on doesn’t work.”

“We think it’s important that Washington not be in charge of health care,” he said in an interview this summer. “The problem that I have with Obamacare is that its premise is that Washington knows best.”

[Read the full story here, at WSJ]

He has championed his own legislation, the Empowering Patients First Act, since 2009, taking a position on a number of hot-button issues for conservative health policy thinkers. In its latest iteration, the proposal includes refundable, age-adjusted tax credits for people to buy insurance if they don’t have access to coverage through an employer or government program. People in a government program, such as Medicare, Medicaid or Tricare, would also be allowed to opt out of it and get tax credits toward the cost of private coverage instead.

U.S. Health and Human Services Secretary Kathleen Sebelius attends an event held in observance of World AIDS Day at the White House in Washington December 2, 2013. U.S. President Barack Obama and his HealthCare.gov website face another critical test starting this week, as Americans who have been unable to enroll in health coverage under Obamacare rush to a site that continues to face challenges. REUTERS/Kevin Lamarque

U.S. Health and Human Services Secretary Kathleen Sebelius attends an event held in observance of World AIDS Day at the White House in Washington December 2, 2013. U.S. President Barack Obama and his HealthCare.gov website face another critical test starting this week, as Americans who have been unable to enroll in health coverage under Obamacare rush to a site that continues to face challenges. REUTERS/Kevin Lamarque

Mr. Price had previously included tax deductions in his plans, a tool typically favored by harder-line conservative health policy thinkers, but said he had “moved towards credits because we felt it was cleaner.”

The plan offers a one-time credit aimed at boosting health savings accounts, long described by supporters as a way of bringing down medical spending, and derives part of its funding from capping how much employers can spend on providing employee health care before being taxed. The plan seeks to make health insurance available to individuals with pre-existing medical conditions by helping states set up new “high-risk” pools or other programs for such enrollees, and sets new rules allowing insurers to sell policies across state lines.

At every turn, he is confronted by the irrationalities and inconveniences of his own health-care law

At every turn, he is confronted by the irrationalities and inconveniences of his own health-care law

But Mr. Price, whose rise in the congressional ranks began at the conservative Republican Study Committee and then steadily climbed, has already said he is open to compromise with fellow GOP lawmakers on many points. Read the rest of this entry »


Why Government Doubles Down on Policy Mistakes

Lawmakers, press and the public need to understand the strength of this “doubling down” phenomenon of and guard against it when adopting policy positions.

In simplified form, the dynamic runs as follows:

1)  Government, in response to a perceived need, takes action to meet that need in a manner that distorts economic behavior and produces predictable adverse effects.

2)  The public consequently experiences problems and expresses concern.

3)  The problems themselves become justification for additional government actions that worsen the distortions and the resultant problems.

4)  As problems worsen, the public more urgently demands corrective actions.

5)  Steps #3 and #4 are repeated ad infinitum.

We have seen and continue to see this dynamic operate in many areas of economic policy. To cite but a few:

Worker Health Benefits

With the best of intentions the federal government has long exempted worker compensation in the form of health benefits from income taxation. Lawmakers aren’t scaling back the flawed policy that fuels these problems.There is wide consensus among economists that the results of this policy have been highly deleterious. As I have written previously, this tax exclusion “depresses wages, it drives up health spending, it’s regressive, and it makes it harder for people with enduring health conditions to change jobs or enter the individual insurance market.” Lawmakers have reacted not by scaling back the flawed policy that fuels these problems, but rather by trying to shield Americans from the resulting health care cost increases. This has been done through the enactment of additional health programs and policies that further distort health markets and which themselves drive personal and government health spending still higher.

Federal Health Programs

The federal government has enacted programs such as Medicare and Medicaid to protect vulnerable seniors and poor Americans from ruinous health care costs.
The positive benefits of these programs co-exist with well-documented adverse effects. For example, it is firmly established that creating these programs pushed up national health spending, driving health costs higher for Americans as a whole. Consumer displeasure over these health cost increases subsequently became a rationale for still more government health spending, rather than reducing government’s contribution to the problem. Examples of this doubling down include the health exchange subsidies established under the Affordable Care Act (ACA), as well as its further expansion of Medicaid. As the problem of high health care costs remains, proposals have proliferated to expand government’s role still further; for example, some have proposed making Medicare available to the entire US population. Though intended to provide relief, such legislation inevitably adds to national health spending growth. Read the rest of this entry »


ObamaCare’s Oligopoly Wave

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Bigger insurance, bigger medicine, and a health consolidation frenzy

The five largest commercial health insurers in the U.S. have contracted merger fever, or maybe typhoid. UnitedHealth is chasing Cigna and even Aetna Humana has put itself on the block; and Anthem is trying to pair off with Cigna, which is thinking about buying Humana. If the logic of ObamaCare prevails, this exercise will conclude with all five fusing into one monster conglomerate.

“The danger is that ObamaCare is creating oligopolies, with the predictable results of higher costs, lower quality and less innovation.

This multibillion-dollar M&A boom is notable even amid the current corporate-financial deal-making binge, yet insurance is only the latest health-care industry to be swept by consolidation. The danger is that ObamaCare is creating oligopolies, with the predictable results of higher costs, lower quality and less innovation.

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“More important, the economics of ObamaCare reward scale over competition. Benefits are standardized and premiums are de facto price-controlled.”

The business case for the insurance tie-ups among the big five commercial payers, which will likely leave merely three, is straightforward. Credit is historically cheap, and the insurers have built franchises in different areas that could be complementary. As for antitrust, selling coverage to employers doesn’t overlap with, say, managing Medicaid for states. (Expect some of the Blue CrossBlue Shield nonprofits to hang for-sale signs soon for the same reasons.)

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More important, the economics of ObamaCare reward scale over competition. Benefits are standardized and premiums are de facto price-controlled. With margins compressed to commodity levels, buying more consumers via mergers is simpler than appealing to them with better products, to the extent the latter is still legal. Read the rest of this entry »


Ten states where Obamacare wipes out health care plans

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Sarah Hurtubise writes: President Barack Obama famously promised, “If you like your health care plan, you can keep your health care plan.” He later got even more specific.

“If you are among the hundreds of millions of Americans who already have health insurance through your job, or Medicare, or Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have,” Obama said.

But as Obamacare’s rollout approaches, we have learned this is not true. Here are the ten states where consumers may like their health care plans, but they won’t be able to keep them.

1) California: 58,000 will lose their plans under Obamacare. The first bomb dropped in California with a mass exodus from the most populated state’s Obamacare exchange. Aetna, the country’s largest insurer, left first in July and was closely followed by UnitedHealth. Anthem Blue Cross pulled out of California’s Obamacare exchange for small businesses as well.

Fifty-four percent of Californians expect to lose their coverage, according to an August poll.

2) Missouri: Patients of the state’s largest hospital system — which spans 13 hospitals including the St. Louis Children’s Hospital — will not be covered by the largest insurer on Obamacare exchanges, Anthem BlueCross BlueShield. Anthem covers 79,000 patients in Missouri who may seek subsidies on Obamacare exchanges, but won’t be able to see any doctors in the BJC HealthCare system. Read the rest of this entry »