The Republican Study Committee is a group that includes some of the most conservative legislators in Congress. A few years ago, it asked Rep. Phil Roe (R-TN), who co-chairs the Republican Doctors Caucus, to come up with a plan to replace Obamacare.
“I was asked to put together a plan that increased access [and] lowered costs but didn’t increase entitlements, so my hands were a bit tied,” he says.
What he came up with was this: Repeal Obamacare entirely. Get rid of the current tax preference for employer-sponsored coverage too. Regardless of where people get their health insurance, the RSC plan would give all Americans a standard deduction for health insurance — $20,500 for families and $7,500 for individuals.
Roe really likes this idea; he says it makes no sense that people who get coverage at work get a big tax break, while those who buy plans on the individual market don’t. He thinks it could extend to the poorest Americans, possibly replacing Medicaid, using tax credits for those who have little or no tax filings from which they can deduct.
“I spoke to somebody relatively high up the food chain today, I won’t say who, and said, ‘Look, why don’t we take this opportunity, while we’re having this debate, and either have a state or two try this — why don’t you do away with Medicaid and CHIP, and just use an advanceable, refundable tax credit so low-income people can go purchase insurance like I am?’” he told me in an interview yesterday in his office.
Roe and I spent about half an hour talking about how he would reform the health care system in America. He is one of the more conservative House members, and I found it notable that he committed to providing just as much coverage as the Affordable Care Act does now — and says that block-granting Medicaid is proving harder than he initially thought it would.
What follows is a transcript of our conversation, lightly edited for clarity and length.
Tell me about your health care bill. One of the thing that seems to be unique about it is it gives everyone — me, you, the people buying Obamacare right now — the exact same tax deduction. Why go that route?
I think it’s a great approach — but it’s not going to happen, and I can tell you why.
Take me, as a family. With the standard deduction, I get $20,500 for my family. If I shop out there on the insurance market and I find one that’s cheaper, I can actually get a refund on my taxes. If I want to go with a Porsche or Mercedes model, it’s going to cost me money. Right now I’m already getting a huge subsidy from the taxpayers, and I don’t have to claim that as income if I get my insurance through the employer-based market.
I was asked in the Republican Study Committee to put together a plan that increased access, lowered costs, but didn’t increase entitlements. So my hands were tied a little bit about what I could do. That is an RSC bill, not a Phil Roe bill. So I said when I put this out, this bill is the start of a discussion. And a debate. And I’m willing to listen to anybody.
The knock on the bill would be what do you do for low-income people.
That was my follow-up question — how do you deal with people who pay no or very little taxes, who wouldn’t really be served by a deduction?
It’s an obvious follow-up question. What you do with those folks is you provide an advanceable, refundable tax credit, so they can purchase insurance, and I think you’ve got to get it back down into the state level.
When Congress passed the ACA in 2010, Tennessee had a plan called Cover Tennessee. It was not perfect, but it was affordable. What we’ve done is we’ve created plans that are perfect, with 10 essential health benefits, but are not affordable for people who don’t get a subsidy. What we did was we had a plan that was affordable but probably didn’t cover quite as much as we’d like to. There’s a flip side.
It was a plan where everybody had some skin in the game: The employee paid $50 per month, the employer paid $50 per month, and the state paid $50 per month. Everybody was a stakeholder. It covered all primary care services. But the limit stopped at $15,000, so you were limited on the top side. What some people did was purchase a catastrophic plan above that.
I spoke to somebody relatively high up the food chain today, I won’t say who, and said, “Look, why don’t we take this opportunity, while we’re having this debate, and either have a state or two try this — why don’t you do away with Medicaid and CHIP, and just use an advanceable, refundable tax credit so low-income people can go purchase insurance like I am?”
And do you think those low-income people should have to pay any level of premium, to have some skin in the game? I’m talking about people who are earning below the poverty line. How do you think they should interact with that system?
Absolutely. An analogy I use is this: If you go to a wedding, and you go to a wedding with a cash bar and you go to a wedding with an open bar, where is the most alcohol going to be consumed? Anytime it doesn’t cost anything, it’s overconsumed.
We have to provide other places to go other than the emergency room. We have 120 primary care providers in my group. We opened an ACO, and we realized that what was going to drain us was going to the emergency room. So what did we do? We opened up a walk-in, outpatient clinic open from 6 or 7 in the morning until 11 pm.
One of the biggest complaints I hear from Obamacare enrollees as well as your colleagues is that the deductibles are too high. But many Republican plans feature high-deductible insurance quite prominently. What do you think the role of deductibles should be in health insurance?
Let me show you, I am such a huge proponent. This is what we’ve had to have.
[At this point, Rep. Roe pulled out his health savings account card from his wallet.]
This right here allows me to meet those out-of-pocket needs. I’ll tell you how bad the ACA is. I had a major back operation this year. This right here allowed me to cover my out-of-pocket costs.
People will tell you Americans won’t shop for health care. We’re the best shoppers in the world. We’ll drive across five lanes of interstate to get cheaper gas. I’ve learned how to shop, and people will learn how to do that.
But you’re also a congressman who can afford to contribute to your health savings account.
If their job didn’t do it, they have done this in Indiana — you put money in the account. You do it with food stamps now. People get a debit card. You put that in there and let them understand that that is their money. The most frugal people in the world are low-income people. They don’t have a lot of money, so they’re going to look after it.
Do you think whatever plan you and your colleagues come up with will cover as many people as the Affordable Care Act? What do you feel committed to on coverage?
After being at the [Republican] retreat, what I thought was going to be hard is not going to be as difficult as what I thought was going to be easy.
What did you think was going to be easy?
What I thought was going to be easy was I thought Medicaid, we’d just block-grant it to the states. That one actually is going to be a little harder than I thought. The reason is there are states like New York, states that expanded [Medicaid]. How do you cover that 10 or so million people on Medicaid?
These two state senators from Montana called today [about Medicaid expansion]. When you start cutting the rolls — that is not easy. I think it’s a good thing more people have coverage. That was one of the whole reasons I ran for Congress, to be part of that policy discussion.
The goal will be to cover at least as many people as under the ACA. You have 8 million people who elected to pay the penalty, which is as many as who got a subsidy. For the people who got subsidies, of course it helped, which is a good thing — you can’t spend $1 trillion and not help somebody. The question is could you have spent that trillion helping more people.
The estimate is that there would be 23 million people on the exchange. It turns out it’s 10.5 million. I’ve had email after email from people who are paying $500 per month. We can’t forget about those people who are out there working, in a small business or on a farm. They make a little too much money to get a subsidy. They’re dying now.
Your colleagues across the aisle, the Democrats, they would say, “We want to increase the subsidies, and that would make it more affordable for these exact people if you would just work with us.” What do you think of their solution?
If you did not have deficit spending, you could not do that. That’s what we ran upon in Tennessee: We have a balanced budget written into our constitution. What came in had to equal what went out. Here we’ve got a $500 billion deficit, so what’s a few more billion to it? That’s what we’re doing. Those subsidies were $33 billion in 2014. And Medicaid came in 50 percent higher than [the Congressional Budget Office] projected. If states were looking at those numbers, they would say, “Stop this program.”
I’m happy for the 3.5 percent of people who got the ACA and get the subsidies. The question is: What about all these other people that don’t? I’m happy for the few who got helped; no question they got helped. Anybody who argues they didn’t is foolish — they did. But how about the people who didn’t get it, who got harmed?