Let’s take a look at four of its primary components:
1.) Allow the sale of health insurance across state lines.
According to Price, such a step would create more competition, and “when insurance companies compete for your business, you’ll get a better product at a better price.”
Would it work? The market has given us its answer, and the answer is no. In 2011, Georgia passed a law making it the second state in the country to allow the sale of health insurance by out-of-state companies. Conservatives at the time were ecstatic. “We think this is great progress in allowing more freedom in health insurance purchasing in Georgia,” said Kelly McCutchen, president of the conservative Georgia Public Policy Foundation.
Four years later, how many policies have been sold to Georgians by out-of-state companies? Zero. Not a single one. Other states have had the same experience, and the reason is obvious. If you’re an Alabama company, you need to negotiate agreements with Georgia health-care providers before you can sell policies in Georgia. And there’s just not enough money in it to justify the hassle.
2.) Dramatically limit medical malpractice suits.
Traditionally, malpractice law has been a state responsibility, with lawsuits handled in state courts under state law. Price and his colleagues propose to strip states of that power with a federal law much like that passed in Texas back in 2003. The theory is that lower malpractice costs for doctors will make health insurance more affordable, and will also encourage more doctors to enter the business.
Did that happen in Texas? Again, no. A dozen years after it passed “model malpractice reform,” Texas has the highest rate of uninsured citizens of any state in the country. It ranks 42nd in the number of physicians per capita and 46th in primary-care physicians per capita. There is no evidence that malpractice “reform” makes health care more accessible or affordable.
3.) Replace Obamacare’s coverage for those with pre-existing conditions by putting them in high-risk insurance pools, with government offering subsidies to bring down costs to consumers.
Prior to Obamacare, many states had high-risk pools of their own. Did they work? No. It turns out that people with pre-existing conditions are very expensive to cover, and states found high-risk pools impossible to fund adequately. The failure of such pools is what helped drive creation of Obamacare in the first place. And House Republicans have already made it clear that they think high-risk pools are too expensive to fund at the federal level.
4.) Replace Obamacare subsidies with refundable tax credits.
Could it work? Yes, this one is actually a decent idea. But to make it work, congressional Republicans would still have to OK tens of billions of dollars a year in health insurance subsidies, and they simply will not do so. That’s why Price’s plan has gone nowhere in the six years since he introduced it, and why it is going nowhere still.