The Business Journal Q&A: The Changing Face of Health Care with Dr. Phil Roe, United States Congressman (R-TN)
By Scott Robertson
Congressman Phil Roe is a founding father of the “repeal and replace” movement regarding the Patient Protection and Affordable Care Act, also known as Obamacare. He wrote the House’s first Obamacare replacement legislation bill four years ago, having been tasked with creating a bill that would increase coverage, decrease costs and not increase entitlements.
Now, with President Donald Trump having issued an executive order that essentially ends the individual mandate, and with the president having nominated Dr. Tom Price, another Congressman who has written Obamacare replacement legislation to be director of Health and Human Services, Roe believes the time has come for his own Obamacare replacement bill finally to move forward.
Roe spoke on two occasions with The Business Journal in January, immediately before and after the GOP Retreat in Philadelphia. What follows is an edited transcript with relevant portions of both discussions.
Business Journal: We are still hearing, despite this bill having been brought forward, that there is no GOP plan for the replace part of “repeal and replace.” But you have a bill, and there are others out there –
Phil Roe: It goes back to how Obamacare was passed. People say, ‘We want to see a bill.’ Well, the reason you haven’t seen one debated is quite frankly because of Senate rules.
Just to give you a quick rundown, Senator Harry Reid put this thing together and had it passed in his office on the 24th of December 2008. In 2009, we had an election in Massachusetts. There had been 60 Democrats and 40 Republicans in the Senate. Scott Brown won the election and said he would not support that bill, which meant they couldn’t get cloture. So the bill they had written, using reconciliation, then became the law. They didn’t have to meet the 60-vote threshold to break off debate and vote on the bill.
So what we have done is we have passed a budget agreement that allows us to use reconciliation. The Senate parliamentarian will tell us what is germane to that bill. Typically it has to do with revenue, but we don’t know exactly what can go in the bill just yet. We’ll know that probably two weeks into February. We’ll debate it as we did in the last Congress and we will pass that.
When Dr. Tom Price, one of my best friends in this Congress, gets approved as Health and Human Services director, by the stroke of a pen, he will be able to do certain things administratively. The secretary was given great latitude on purpose. I guess they assumed a Democrat would always be there or that people would love this bill so much that it would stay there. So we’ll know what he can do in a few weeks. What is left is going to be the hard part. That is going to be the nuts and bolts of the bill that I have.
One of the things I’m going to push extremely hard on is transparency in healthcare billing. Right now you’re asked to go to a hospital, which I did four months ago, and sign a piece of paper that says, ‘I’ll be responsible for everything that happens to me, no matter what you do to me,’ not knowing at all about what they may do to you. You would never go into a car dealer and sign a piece of paper that says, ‘Whatever you roll out, I’ll buy it and be responsible for it, no matter what it costs.’ Nobody buys anything else like that. People say you can’t shop for health care. They’re wrong. You can. LASIK eye surgery is the perfect example of how consumer-driven health care works.
The second thing you’ll see us debate, and it’s a bit arcane, is McCarran Ferguson, which gives some anti-trust exemptions to the insurance companies. They need to go away. Finally, there’s medical malpractice reform.
The real debate we’re going to have is going to be on how to insure lower income people. I talked to Governor Haslam at dinner the night before President Trump’s inauguration. I told him I would like to come down to Nashville, and any other members of our delegation are welcome to be there, to meet with him and the state legislators and find out what they want to do. The best laboratories in the country are our state legislatures. They’re the ones that have to administer these programs. I want to know what they want to do, whether it’s per capita for Medicaid, a block grant for Medicaid, how they want to care for people.
The other debate will be whether we provide advanceable, refundable tax credits for people so they can take the tax credit and go out on the open market and buy an insurance policy like anybody else. The reason I didn’t put that in our bill and used the standard deduction for health insurance was because that expanded an entitlement and I was instructed not to do that. I think that will probably be what happens to insure lower income people, or some modification of that.
I hope we will be able to get a terrific malpractice bill that Andy Barr, who represents eastern Kentucky has, to become law.
That’s pretty much the trajectory.
The Business Journal: In the announcement of your bill by the Study Committee, Mark Walker said the committee’s job is to “bat leadoff” on this. We’re already seeing other legislators come forward with other ideas. You were the first one to go up to the plate and take a hack in this, but we had the Sessions/Cassidy/Collins plan announced a few days ago, Energy and Commerce has talked about a pre-existing conditions bill, and more are likely to come. First, what are your thoughts on what you know of the Sessions/Cassidy/Collins proposal and second, how much of what you’re proposing do you think you’ll actually end up with at the end of the day?
Phil Roe: Well, I haven’t read Dr. Cassidy’s entire proposal, and he is a dear friend, but one of the things they proposed was that for states that were happy to use the Affordable Care Act to continue to do it. That won’t work.
It will be even worse when you shrink the pools even more. It just means more and more subsidies. It cannot survive the way it’s going unless you just decide to pay all the bills for people.
The bill I worked up will ultimately be about 70 to 80 percent of what we finally see. The main part will be the expansion of the health savings accounts, which everybody agrees on. Crossing state lines and association health plans are going to be the backbone of it. The real question remains how to care for low-income people.
We’re going to hear about pre-existing conditions, and in 2009 and 2010, I fault myself for not doing a good job of explaining pre-existing conditions to people in a way they could understand it. What I should have said was, ‘If you have your health insurance through your employer, you cannot be discriminated against on pre-existing conditions because ERISA, The Employee Retirement Income Security Act of 1974, protects you from that. If I hired somebody in my practice, there may be a waiting period of 90 days or 30 days or whatever, but once they’re in there, you have to cover them. We had to absorb that cost, as did every business, whether they’re self-insured or had individual insurance policies.
If you get Medicaid or Medicare, you can’t be discriminated against for pre-existing conditions. The fear was, ‘I’m at my job. I get sick. I lose my job. Now I can’t get insurance.’ What I put in my bill was, ‘If you had insurance through your job, if you find an insurance policy that meets your needs after you lose your job, and you have continuous coverage, you cannot lose your coverage. I just extended ERISA-based pre-existing condition protections to the same people. If you had insurance coverage before, you can get it again without a pre-existing conditions disclaimer.
The other way we handle pre-existing conditions is through a high-risk pool. But that’s how I did a poor job. We agree people shouldn’t lose coverage for pre-existing conditions. We also agree (with the ACA) about having children stay on their parents coverage until the age of 26. We had put that in our bill.
The Business Journal: Let’s go back to something you touched on earlier. You mentioned the McCarran Ferguson Act. That’s not something we hear as much about as, say, pre-existing conditions. Enlighten us on why McCarran Ferguson matters.
Phil Roe: I’ll give you a real-life example. When I first came to Johnson City, Drs. Hillman and Miller had a great OB/GYN group. Our group were their competitors. Well, I played golf with Charlie Hillman. He and I were friends. But I couldn’t go to the golf course and say, ‘Hey Charlie, what do you guys charge to deliver a baby?’ That would have been against federal law. I could be put in prison for that. So there was an anti-trust law, but insurance companies are not held to that same standard. They can go into a market and negotiate with a hospital – and negotiate in collusion with another insurance company.
We want to remove that anti-trust exemption and make them operate under the same law. Right now the employer and the patient are very much at a disadvantage. I think most insurance companies now are okay with that, because it doesn’t apply to everything. We don’t want to meddle in anything but the health insurance side. It doesn’t apply to life insurance or other types of insurance.
The Business Journal: So you’re talking about bolstering free market competition –
Phil Roe: Absolutely.
The Business Journal: ¬– which is what we’re hearing you say about transparency for the providers as well?
Phil Roe: We can’t tell Blue Cross or Aetna or whomever to post it, but what we can do is demand Medicare tell us what they pay. That way, you or I would know, if we went down to have our appendix out, what Medicare would pay for it. So if we pay some of it out of our health savings account, maybe we can negotiate a better rate that’s closer to what Medicare pays, which a hospital will accept. Knowledge is power, and right now, we the people paying the bills don’t have access to it. My bill says, ‘You will make that information available to consumers.’
The Business Journal: So what more do we know now, after the retreat, about the direction “repeal and replace” will take?
Phil Roe: The healthcare discussion came in four areas. One is what we can do with reconciliation. We should know within the next couple of weeks what can be in that package. Number two, is when Dr. Price gets approved. I talked with him yesterday by phone about what he can do administratively. Thirdly, and this is much more difficult, what we’ll have to do legislatively. The reason it will be difficult is because in the Senate, we still have that 60-vote threshold cloture vote. It makes it very difficult.
There’s no question that Harry Reid will cut lose three or four of his Democrats to vote for this. Joe Manchin, Claire McCaskill, Heidi Heitkamp, and Joe Donnelly from Indiana will. So we may get 58 votes in the Senate, but we won’t get 60.
They talked at length about stabilization of the insurance markets, which are very unstable right now. In our state, 70 percent of the counties have only one provider on the exchange. That’s the exact opposite of what competition is. That’s a monopoly.
President Trump did mention yesterday that one thing to do would be just to do nothing, but it wouldn’t be the right thing to do because the ACA has collapsed and it is hurting people who have to pay these outrageous rates. The 3.5 percent of the people in this country who get a subsidy get a good deal, but the rest of the people out there who are paying the fine and who can’t afford insurance because premiums are now higher than their mortgage, it’s a bad deal.
The other discussion on health care is going to be a very difficult one. I think we should go bold. I’m going to push it hard when we get back. I probably won’t be successful, but I’m going to – it’s what we do with Medicaid. We talk about how you take care of low-income people between 100 and 138 percent of the poverty level.
As I said last time we spoke, I’m going to set up a meeting with the governor’s staff and any of the other legislators who want to take part. Rusty Crowe, I think, is going to set it up for me in Nashville. I want to find out what the state people want.
What I would like to see us do is go bold and just do away with Medicaid and CHIP (Children’s Health Insurance Program) and do an advanceable, refundable tax credit so you wouldn’t have this hodgepodge of Medicare, Medicaid, CHIP, private health insurors and the exchange market. What you would have is a marketplace where someone who has a tax credit can go purchase health insurance. They can have health insurance policies just like anybody else does. They want to pay a little more, they can, but they get a basic policy like with Medicaid except from a private market. I think that’s what we should do, just get rid of it. Then everybody has an insurance policy. You can get very close to insuring everybody in the country very easily.
I think the money is there to do it because there are so many inefficiencies in the Medicaid system that if you were to lop all that bureaucracy out and just let it be run by the private market, you’d be better off. Now I’m going to tell you. That’s very bold, but I’m going to bring it up. I’ve brought it up before. This is a unique opportunity.
So the debate was, ‘What do we do with Medicaid? Do we do a block grant? Do a per capita? Or do we do something really bold like I’m talking about?’
The Business Journal: Did you get a chance to speak with any other representatives or senators who are putting forward healthcare bills about how you all might be able to move forward productively instead of stepping on each other?
Phil Roe: Yes. Next week, the Energy and Commerce Committee will have three hearings. Our Education and Workforce Committee, which is in charge of all ERISA-based private health insurance, will be working on this in February and March. I tell you, there are some Democrats who are going to have to make some tough votes. We’re going to put a bill together – and it will take a month, six weeks, maybe two months to get it through the subcommittees and then the committees and onto the House floor – but there’s going to be a good Republican alternative bill out there that they’re going to have to turn down. That puts the monkey on their back.
Now there are some things in the ACA that I like. There are some things in Medicare – the accountable care organizations are doing tremendous things, for instance. We have a couple in Johnson City that are doing good work, saving Medicare money and increasing quality. So not everything in there is bad. I’m looking forward to the next couple to three months. Actually 200 days is what we’ve talked about. We’re going to be working long, long days, but I’m really looking forward to it.