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Trump's Pick of Price Puts Obamacare in the Crosshairs
U.S. Rep. Tom Price (R-GA) tears a page from the national health care bill during a press conference at the U.S. Capitol March 21, 2012 in Washington, DC. (Win McNamee/Getty Images)

Trump's Pick of Price Puts Obamacare in the Crosshairs

Jeffrey H. Anderson

Opponents of Obamacare should be greatly encouraged by President-elect Donald Trump’s pick of House Budget Committee Chairman Tom Price to be the Secretary of Health and Human Services. Price, an M.D., has advanced the most serious Obamacare alternative to date on Capitol Hill. His legislation (H.R. 2300) is co-sponsored by 84 House members, including Jeb Hensarling, Mike Pompeo (Trump’s pick to lead the CIA), Trey Gowdy, and Marsha Blackburn. Bill Kristol called Price’s alternative “the strongest Obamacare alternative offered in Congress to date” upon its introduction in 2015.

Price’s bill, which I helped draft, would fix what the federal government had broken even before Obamacare was passed and made things so much worse. Specifically, it would address the tax inequity that has plagued our health insurance system since the World War II era. There’s no good reason why those who get health insurance through their job should get a tax break, while those who have to buy insurance on their own do not. Yet that’s how things have been for seven decades.

Price would largely end this tax inequity. He would do so by offering a simple, non-income-tested, age-based tax credit to those who buy health insurance on their own. Everyone could quickly see what their tax credit would be: $1,200 for those under the age of 35, $2,100 for those between 35 and 50, and $3,000 for those 50 and over, plus $900 per child.

Such flat tax credits, aside from three simple age-defined brackets, would encourage people to buy genuine (“catastrophic”) insurance, rather than the sort of prepaid health care that increases the middleman’s role and raises costs. Anyone who buys insurance for less than the value of their tax credit could pocket the difference in a health savings account (HSA).

Importantly, Price’s legislation would also offer a one-time, $1,000-per-person HSA tax credit to anyone who has, or who opens, an HSA. The combination of Price’s proposals would help put people in control of their own healthcare dollars, encourage them to shop for value, make prices appear, lower costs, and revitalize the individual market. And by repealing Obamacare, the plan would restore liberty and keep the federal government from taking over American medicine.

Showing good political instincts, Price wouldn’t touch the tax treatment of the typical American’s employer-based insurance. His plan would simply close a high-end tax loophole, capping the tax exclusion for employer-based insurance at $20,000 for a family plan and $8,000 for an individual plan. (A family with, say, a $22,000 plan would still get their full tax break on the first $20,000, just not on the last $2,000.) There’s no reason why the government should be offering an open-ended tax break that says the more your employer spends (on insurance), the more you save (in taxes)—especially when such an open-ended tax break isn’t available to those who buy their own insurance.

The fact that Trump picked Price to head HHS provides further evidence that the president-elect is determined to make good on his oft-stated campaign pledge to “repeal and replace Obamacare.” Price should provide a steady hand as he helps lead the process.

About the worst thing Republicans could do is pass partial-repeal legislation (they couldn’t pass full repeal without 60 Senate votes) that collapses the coalition needed to pass replacement legislation. This would leave Obamacare mostly intact while causing Republicans to take at least partial—and maybe even majority—ownership of its sky-high premiums.

Price’s presence, and his longstanding emphasis on the need for a replacement, makes such an unsatisfactory result less likely. It makes it more likely that Obamacare will be legitimately repealed and replaced with a conservative alternative—which might well be the greatest domestic-policy victory in the history of the conservative movement.

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