Paul: We are united on repeal, but divided on replacement

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Paul: We are united on repeal, but divided on replacement

Kentucky lawmaker gives his take on the new health bill

This is a rush transcript from "Your World," March 8, 2017. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST:  All right, you heard from Health and Human Services Secretary Price that he thinks, when all is said and done, despite the commotion, that the plan that the leadership of the Republican Party put out to repeal and revamp Obamacare will be the one that wins the day.

I think my next guest might slightly disagree with that, Kentucky Republican Senator Rand Paul.

Senator, he thinks it's that plan, not your plan.  What do you say?

SEN. RAND PAUL, R-KENTUCKY:  Well, you know, I think we're pretty united on repeal, but we're pretty divided on replacement.

About a year ago, we voted unanimously to repeal the whole thing in a clean repeal.  I still think that's about all that will pass.  On replacement, we're very, very divided.  The Obamacare-lite plan that is being put forward by the House leadership continues subsidies, continues Obamacare taxes, has a mandate, and has insurance bailout money in it.

So, no, I don't think we're at all on the same page on that.

But I think you could put forward repeal separate from replacement, and I think we could get something passed.

CAVUTO:  All right, you mentioned the taxes that continue, at least through this year.  Secretary Price was quite insistent that, next year, they go away.  You don't buy that?
 
PAUL:  Except for the Cadillac tax, which goes on forever.

CAVUTO:  OK, so that's a big problem for you.

The president seems to think he can win you over, Senator.  And quoting his tweet: "I feel sure that my friend Rand Paul will come along with the new and great health care program because he knows Obamacare is a disaster."

What do you say?

PAUL:  Well, I do agree with the president.  And I talked to him this week. I agree that Obamacare is a disaster.  And I agree that we should repeal it.

And so I think that's where the unity is.  And then we are going to have to have a debate over replacement.  But I don't think the conservatives in the House or the conservatives in the Senate want a new entitlement program, continued Cadillac tax.

We're not for the insurance mandate.  We complained for six years about the individual mandate.  And the House -- the Obamacare-lite plan, instead of paying the mandate with a penalty to the government, you pay it to the insurance company.  I think that is a distinction without a difference.

CAVUTO:  All right, you're talking about the one, after a couple of months, as you switch over, young people, more to the point, switch over to a plan, they get a 30 percent penalty.  Right?

PAUL:  Yes.

And, in fact, it actually might be a disincentive, because let's say you have lost your job or you don't have enough money to be on insurance for a while.  And you know that, when you started again, you have a 30 percent penalty, but you also know that you could start it any time you get sick.

Boy, my goodness, as expensive as insurance is, most young people would say, hmm, 30 percent, I'm going to have to pay it some time anyway.  Why don't I wait until I get sick to pay that penalty?

CAVUTO:  Yes, I think that's the problem in the plans as they stand, right? You are a doctor and have a background on it.

But I think young people -- and I have raised this with so many guests, maybe even the last time you were here -- they feel indestructible, Senator.  They feel that they don't need to do it.

And all the incentives in the world, I dare say you could throw $20,000 in tax credits at them, I don't know if they will go along.  So, how do deal with that?

PAUL:  Well, no, what they would go for, what they would go for is inexpensive insurance.

And what you're finding is, I'm not so sure we're going to get inexpensive insurance.  To get inexpensive insurance, you need a catastrophic policy. I'm not positive, under the House plan, you're going to be able to get a catastrophic policy.

That really has to be high deductible, low premium policy.  Right now, the biggest problems in the individual market, premiums are soaring and people are not participating that are healthy.  And it's having this adverse selection where you have a lot of sick people and not too many health people.

CAVUTO:  And we have a high deductible environment as well.  So, you have the higher premiums and the high deductibles.

PAUL:  Exactly.

CAVUTO:  Yes.

PAUL:  I'm not so sure that anything in the House plan changes that.

My fear is that, if you tell people you can buy insurance after you get sick, they will continue to do that.  My fear is that, under the House plan, Obamacare-lite, that the situation continues to get worse.  In fact, they admit as much, because they put $100 billion in there to bail out the insurance companies.

So the insurance companies don't have risk.

(CROSSTALK)

CAVUTO:  Where is that $100 billion coming from?  I saw that as well. Where is this pool of money coming from?

PAUL:  That's a really good question.

But I'm not really excited about bailing out the insurance companies and assuming their risk, having the taxpayer assume their risk.  But the insurance companies are a little bit disingenuous.  They come to Washington asking -- acting like they're the best patriots in the world and they want to help everybody and they want guaranteed issue.

But they want guaranteed issue only if the taxpayer pays for it.  So, no, I mean, they're disingenuous in this.  But the House plan ends up insuring the insurance companies against loss.

And I don't think that's what the federal government ought to be doing.

CAVUTO:  All right.

The key similarities in both plans as they stand now -- and I would like to, with each one of these, whether you agree or they should be the same. Do you think there should be coverage for preexisting conditions?

PAUL:  I think what ought to happen is, we ought to try to have -- let people join a health care association with a lot of people.  And that would be a group plan.  And then they would get protection against preexisting conditions.

I think if you simply mandate it in the individual market and you take away the individual mandate, and you have this insurance mandate, it won't be enough.

CAVUTO:  OK.

PAUL:  And I think the insurance companies will continue to spiral down. Premiums will continue to spiral up.

CAVUTO:  All right, and I'm sorry to gun through this, but what about lifting lifetime cap on coverage?  You agree with that?

PAUL:  I think that, if we get people in group insurance, you have the leverage to get all of the things you desire in the terms of insurance.

CAVUTO:  All right, both of the plans presently tax generous employer plans.  Would you?

PAUL:  No.

I think if you can negotiate a good insurance plan, why would we want to punish you?  So, this comes from this top-down sort of government knows best.  The government doesn't think you should have a really good or expensive plan, so government is going to tax that.

I'm completely against that entire notion that government knows best ever.

CAVUTO:  Gotcha.

We're hearing the president might be visiting your state, Louisville, more to the point, this weekend.  Do you know anything about that?

PAUL:  I have heard the rumors.  And we welcome him.  He's very popular in our state.

CAVUTO:  He might be pressuring you.

(LAUGHTER)

PAUL:  Well, I'm a big supporter of what he has done in deregulating our coal industry.  I have been promoting that here for years.  We're lucky to have him as president with regard to deregulation.

He's for lowering taxes.  So am I.  And we're hoping we find common ground. And I think the common ground Obamacare is that we're both for repealing it.

CAVUTO:  All right, Senator, thank you for taking the time, Senator Rand Paul.

PAUL:  Thank you.

END

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