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Rep. Tom Price's 'Empower Patients First' Act

priceholds.JPGJust spent a few minutes on Dylan Ratigan's program chatting with Rep. Tom Price (R-Ga.) about his "Empower Patients First" Act. Price's bill has a couple of good ideas in it: Automatic enrollment, for one thing. And extending the employer tax deduction to individuals while capping it at "the average value of the national health exclusion for Employer Sponsored Insurance (family/singles) grown at inflation." This amounts to a huge tax increase, incidentally, although Price won't call it that.

But the plan won't work. In particular, its version of the health insurance exchanges will collapse pretty quickly. There's no individual mandate ensuring that the pool includes both healthy and sick individuals, no insurance market regulations stopping insurers from cherrypicking, and no risk adjustment rebalancing the scales when they do. In other words, this looks much like the reforms that collapsed in Texas, and in California. Price isn't learning from past policy mistakes, and so he means to repeat them.

In the interview, Price explained that he couldn't abide by an individual mandate because it meant Congress would define what constituted insurance, and that would harm awesome products of the market like Health Savings Accounts and catastrophic policies. Defining insurance, Price said, is not a good role for Congress.

This is a weird argument given that Rep. Price voted for the legislation that created and defined HSAs.

HSAs are accounts that Congress has blessed with a special exemption from taxation. That means they were created by an act of Congress (the Medicare Modernization Act of 2003, to be precise), and they are defined in legislation written by Congress. You can see the regulations here. Price is really saying that Congress shouldn't define insurance in a way that harms other things that Congress has defined as insurance. But that makes for a rather worse soundbite. The argument here, however, is not a philosophical question about the reach of Congress. It's an argument about what the minimum level of health-care insurance should look like.

Photo credit: REUTERS/Jim Young.

By Ezra Klein  |  October 7, 2009; 10:53 AM ET
Categories:  Health Reform  
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Next: The Radical in David Brooks


"But the plan won't work."

Since when was that a requirement for a Republican health care plan?

Posted by: leoklein | October 7, 2009 11:19 AM | Report abuse

It does accomplish what I think is one of the most important goals we could have, decoupling health insurance from employment.

This goal is terribly unpopular because for most people it would mean losing what they currently have. However, what we currently have is a system where the employer has control over the employees' coverage paid with employees' earnings where the coverage is not portable.

There are other aspects that are horrible about this system that I've not listed. If only people would recognize the very real opportunity cost of the current system and embrace the better deal.

Posted by: bcbulger | October 7, 2009 11:32 AM | Report abuse

I hate those HSAs. They give the illusion of a safety net without really providing one. Even if you max one out for years (which I advise no one should ever do), a serious illness will wipe such an account out in no time at all.

HSAs are for idiots, I strongly believe.

Posted by: susanjb | October 7, 2009 11:32 AM | Report abuse

"Price isn't learning from past policy mistakes, and so he means to repeat them."

Actually that should read, "Price is learning from past policy mistakes, and he means to repeat them." He does not want a plan to work. It is political theater. It is not real policy.

Posted by: michiganmaine | October 7, 2009 11:33 AM | Report abuse

The individual mandate, though, may only be possible at the State level: the Constitution doesn't seem to give Congress the power to make such a mandate.

My point is twofold. First, the organs of government empowered to make an individual mandate (States) have chosen not to do so. Second, a workable plan must include an individual mandate but by doing so will face severe, lengthy, and ultimately crippling judicial challenges.

Posted by: rmgregory | October 7, 2009 11:39 AM | Report abuse

I don't know what a "national health exclusion" is but I'll take you're word for it that you won't be able to pay premiums with pre-tax dollars beyond a certain amount.

I was reading the rest, and man--if you are a highly-paid specialist are you going to love this plan. It cripples malpractice and MedPAC right off the bat. But the biggie is the ability to write off uncompensated care. If it means what I think it does multimillionaire neurosurgeons and other specialists will no longer pay any federal income taxes. But the lowly primary care doc only gets "help paying his loans" up to $50K :(

Posted by: bmull | October 7, 2009 11:41 AM | Report abuse

The current individual mandate is just $66 dollars a month. That means that any individual can just to along with that $66 a month and they if they get sick or injured then they will be allowed to buy into whatever the most full featured healthcare plan there is and the insurance company would not be allowed to turn them down for their pre-existing condition. The individual mandate is the crux of the whole direction the democrats are going down and I think its going to be a disaster.

Posted by: spotatl | October 7, 2009 11:50 AM | Report abuse

Only in America's wildly dysfunctional health care system could a tax shelter actually do double-duty as heath insurance.

This is not an endorsement of HSAs. It's an indictment of our current system.

Posted by: theorajones1 | October 7, 2009 12:08 PM | Report abuse

Massachusetts had a low mandate penalty initially to get their law passed and now it's going way up. That's probably what will happen here too. They're also talking about disguising the penalty somehow as a restricted tax break. We know it's not going away because stakeholders were promised 94% coverage in their backroom deals.

Posted by: bmull | October 7, 2009 12:17 PM | Report abuse

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