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What your health insurance might look like under Trump's new health secretary

SALT LAKE CITY — President-elect Donald Trump's choice of Georgia Rep. Tom Price as the secretary of health and human services sent a strong signal that he intends to follow through on plans to repeal the Affordable Care Act.

The tea party Republican has been working for years to replace the health care law he once called a "misbegotten monstrosity."

There are several competing plans to replace President Barack Obama’s health care law, but Price's draft — at 242 pages — is the most detailed.

Here are some key planks — and how they might affect you.

1. Assistance through tax credits

Much like Obamacare, Price's plan suggests giving out tax credits to help people buy insurance.

How much you get would depend on your age. Price has proposed $100 per month for adults 18 to 35, which would go up to $250 per month for adults 50 and older.

Price has also proposed expanding health savings accounts, which allow people to sock away money before taxes to pay for health care needs.

The idea is to encourage people to budget for predictable medical expenses — like primary care visits — and rely only on insurance only for catastrophes.

That's a common theme among Republican health care proposals, said BYU economics professor Mark Showalter.

“What the Republican plans are likely to do is put more burden on consumers as far as their health care costs,” Showalter said. “Most of them have an almost explicit motive to reduce the use of insurance in paying for medical care.”

By nudging people to pay for more things out of pocket, the hope is that people will do more shopping for the best price.

“That’s not a pleasant thing — try to call a doctor and ask how much an MRI’s going to cost,” Showalter said. “But the Republican plans all kind of push consumers in that direction — to pay more of the cost of the care and be more price-sensitive.”

2. Slimmer plans, cheaper premiums

“One of the biggest things we often hear about the replacement plans is what we’re going to get rid of,” said Jason Stevenson of the Utah Health Policy Project.

Price has proposed getting rid of a major tenet of the Affordable Care Act: The requirement that health plans cover 10 essential benefits, including maternity care and mental health services.

Instead, he would open it back up to insurers to cherry-pick which benefits they want to cover in each plan.

That means insurance offerings will look a lot more like they did before Obamacare, when insurers could raise the price for certain individuals based on their gender, age or health status.

Showalter said that will likely make insurance more efficient and cheaper.

But Stevenson said it will come at a cost.

“If you’re perfectly healthy and you never have any issues and you’re young, then this could benefit you,” he said. “Your rates might come down a little bit."

People who are older, lower-income or need more comprehensive plans, however, may see those prices go up, he said.

3. No mandate — but people with pre-existing conditions will be exposed

One of the most popular aspects of Obamacare was the provision that prevents insurers from charging a patient more if she or he has a pre-existing condition.

Price and House Speaker Paul Ryan have both said they want to keep that provision — but with conditions.

Price's plan would require patients to maintain coverage for at least 18 months. If you lapse, you can be charged up to 150 percent of the standard rate for two years for your pre-existing condition.

Showalter and Stevenson both said they are skeptical that Republicans can continue to protect people with pre-existing conditions unless they mandate that people get insurance.

“There’s no way around this,” Showalter said.

Insurance works when there are enough healthy people in the mix to balance out the sick, he said. If nobody is required to get insurance, only the sickest people will sign up, which will drive costs up.

“You cannot ban pre-existing condition discrimination without some sort of stick to get healthy people to enter the insurance market,” Stevenson said. “It just doesn’t work.”

4. High risk pools are back

Price and Ryan have both proposed bringing back government-run high risk pools as a safety valve for these folks.

How well these work will vary from state by state.

Tomi Ossana, the former director of Utah’s high risk pool, said the program was a necessary but costly safety net.

The state shelled out $2 million to $16 million a year to subsidize costs in the pool. Patients in the pool paid an average of $300 to $400 a month in premiums. Those who couldn't afford the premiums went uninsured and relied on charity care to get by. Many ended up in the Medicaid coverage gap after the pool was shut down, Ossana said.

The program was also amassing larger and larger deficits each year by the time it closed due to rising demand and medical costs.

Ryan has proposed spending $2.5 billion per year to fund high risk pools. Price has proposed about $1 billion per year.

If the pools were to be brought back, Ossana said they would need a more stable funding mechanism and more funding to help people with premiums.

“It protected those individuals that really were denied in the private market, but it was costly,” she said.

5. No more tax breaks for employers

Experts estimate the government loses around $250 billion a year by not taxing health insurance premiums for employer-sponsored plans.

Price has proposed capping how much companies can deduct in taxes from employee insurance.

Economists love the idea. Corporations and unions hate it. The Affordable Care Act also passed a version of this known as the "Cadillac tax,” which was vigorously opposed.

Showalter said employers will likely react by shifting some of the cost onto their employees. That means cutting benefits or switching to high deductible plans.

"That will affect a lot of people," he said. "Economists are all over it. … But it's tremendously unpopular."

What's the bottom line?

As with any policy change, there will be trade-offs.

Showalter says the Republican plan is likely to bring premiums down overall by allowing insurers to craft narrower plans and moving sicker people to a different pool.

But there will be a trade-off in the “social justice sense,” he said. Certain people will benefit, while others will have to pay more.

"If they're a sicker household, they're going to face a higher cost," Showalter said, including many of those who gained insurance through Medicaid expansion.

Women could also find themselves paying more, as they did before the Affordable Care Act. Requirements that insurers cover maternity care and contraception will likely be challenged under Price.

Stevenson said he is pessimistic that the Republican proposals will bring down prices unless they can figure out how to pay for the provision that protects people with pre-existing conditions.

“It’s the sick, the vulnerable, the lower-income that are going to be really hurt by these changes to the system," Stevenson said.

What is the likelihood of this happening?

The Affordable Care Act is a massive and complex piece of legislation.

Republicans can dismantle some parts of it through a process known as budget reconciliation. With a simple majority vote, they could get rid of the tax credits, the individual mandate and gut Medicaid expansion.

But they cannot change some of the most popular provisions of the law without a two-thirds majority. That includes the ban on pre-existing condition exclusions and the requirement that insurers cover young adults on their parents' policies.

Opponents of the law will also have to keep in mind that some 20 million people gained health care coverage under the Affordable Care Act. By repealing the law without a backup, millions could lose coverage.

So that means for a full repeal and replace, Republicans will need a plan — and the cooperation of Democrats.