Price: Health bill is a major step in the right direction

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:  With us now, I'm happy to say, the health and human services secretary of the United States, Tom Price.

Secretary, thank you for coming.

TOM PRICE, U.S. HEALTH AND HUMAN SERVICES SECRETARY:  Thanks, Neil.  Good to be with you again.

CAVUTO:  All right, the back and forth on this feels like the back and forth on the Democratic initiative, what, almost seven years ago now.  Is it?

PRICE:  No.

What we have done over the past literally year-and-a-half years has been to work in an open way and in a transparent way to try to craft a replacement for what is a current law that is harming people, that we got costs going up, we got care going down.

And it's only getting worse, especially in that individual and small group market.  So this is a solution.  This is a positive solution.  It's one that seeks to put patients and families and doctors in charge of health care and not the federal government.  This is a major, major step in the right direction.

CAVUTO:  Congressman -- Congressman -- I'm going back to your old job.  I apologize.

(LAUGHTER)

CAVUTO:  Secretary, when you see the response you're getting from conservative groups that are upset, from the Club for Growth, to the Koch brothers and others, some of these conservative senators I alluded at the outset, including Rand Paul, who will be joining us soon, that they don't like it, they don't this is doable, are you surprised by their reaction?

PRICE:  Well, some of it is process talk.  Some of it is tactics talk.

But if you look at the whole package together, phase one is this reconciliation bill that has -- that is required to go through the budgetary process.  And there's some confinements to it, some constraints to it.

CAVUTO:  Right.

PRICE:  Phase two is what we're able to do here at the department.  All of the hundreds of rules and regulations that were put in place by the previous administration, we can look at them and say, do they help patients, do they decrease costs?

And, if they do, we ought to be doing more of them.  If they harm patients or increase costs, then we ought to do away with them.  And then the third phase is that phase that requires a further piece of legislation.  Those are the kind of insurance things, association health plans, purchase across state lines, medical malpractice reform, all of those things.

If you look at the totality of it, it's the kinds of things that we have been working for, for years and years and years to get that patient- centered health care going.  So, I think that, if people look at the entire package together, that they will be wholly supportive.

CAVUTO:  Some of those items you talk about going over state lines, et cetera, that is added in later?  Is that what I understand?

PRICE:  It's a process through either the regulatory component or through the process that is not going through the budget bill itself.

Now, the budget bill is very confined because there are rules for things that can't go it if they don't deal with either revenue or spending.  And so that's confining to it.  So, there has to be another legislative package as well.

CAVUTO:  How aggressively do you think the president will be leading this charge to get your initiative, the one that you have been working, along with your colleagues, through?

PRICE:  Well, the president is wholly behind this.  He understands and appreciates that Obamacare has been a challenge for so many millions of Americans across this country, again, that we have got a third of the counties in the nation that are only having one insurance issuer in the county.

Five states, there some counties in Tennessee and Mississippi where in 2018 there will be on issuer at all unless there are changes.  Prices are going up.  Deductibles are going up.  People may have an insurance card, but they don't get care because the price of the deductible is too high.

So, the president understands clearly that this is to help people.  This is about patients.  This isn't about politics.

CAVUTO:  So he will do his level best to get this initiative, the one that the leadership came up with, and not the one that conservatives are trying to push through?  That's where he has set his ducks?

PRICE:  He believes strongly in this package of the three different phases and believes strongly with the first phase, which is the bill that is before the House committees today.

CAVUTO:  Do you feel that you're going to lose a lot of people who have insurance now, that the 20 million or close to who have coverage through Obamacare, it's inevitable that they will lose -- some will lose it?

PRICE:  No.

CAVUTO:  Do you know how many?

PRICE:  I just simply don't believe that, because if you look at what the baseline is, what the current law is, people are losing their insurance right now.

There was a report out last week that demonstrated that there were three or four million individuals who were going to lose insurance because the insurance companies are pulling out of the market.  They're not even there to offer the product.

And, Neil, we have got to remember again that there are 20 million people, 20 million Americans who should be purchasing insurance, but have said, I can't do that.  I will either accept the penalty or ask for a waiver.

That means we're not responding with a system that actually works for people.  So, if you think about the patients out there, the program that we-- that the house has brought forward and that we're fully supportive of, that's a program that will get more individuals covered, the costs will come down.  They will be able to purchase insurance that they want for themselves and for their family, not that the government forces them to buy.

CAVUTO:  You know, Secretary, I have had a chance to talk to some of your old colleagues on the Hill.  And many in this Freedom Caucus, I guess close to 40-members strong, say that they can't support a system that has these tax credits built into it.

I know the goal is do help people get the insurance in the first place. But they still see it as a subsidy.  What do you tell them?

PRICE:  Yes, this is a little perplexing, because we have always talked about -- you and I have talked about trying to equalize the tax treatment of insurance.

Right now, the folks who get their insurance through their employer -- that's about 175 million Americans -- that's where most of us get our insurance.  There's a tax benefit to that.  There's a tax reduction for the employer and, in essence, the employee by getting their insurance through their employer.

The folks that don't get a tax benefit for gaining -- for getting the purchase of health coverage, those are the folks in the individual and small group market.  And that's what this tax credit does.

It equalizes the tax treatment for those people who aren't getting their health coverage through their employer.  We have talked about it for years and years.  It's the right thing to do.  It's the fair thing to do.

CAVUTO:  Do you think that you can, with tax credits, encourage young people to buy?  Because they have tried everything to get young people to buy insurance, but maybe owing to their age -- and you're a doctor -- that they feel bulletproof or that they're super men and women and they don't have to.

PRICE:  Yes.

CAVUTO:  So no matter what is thrown at them, they don't seem to buy.  Now, even a mandate and penalties doesn't do it.

Now, I know built into this plan is a surcharge for those who let a time period lapse and they will do it.  So, doesn't this have its own little mandate feature?

PRICE:  No, it's not a mandate, because we are not dictating to people what to purchase.

The reason that young healthy individuals will purchase it is because there will be an array of choices that they have.  Right now, they get one choice.  They have to buy what the government says they have to buy.

We believe it's important for them to be able to have the choices so that they can buy what suits them best and their family best.  And that's how you bring the prices down, competition for their business, for their support, for their coverage plan.

Make it so that they're able to purchase what they want.  And that's how you get folks to be able to purchase the coverage that will be present for everybody.

CAVUTO:  Do you think that everyone should wait until the CBO scores this thing before they vote on it?

PRICE:  No, this is not unusual at all to have legislation go through committee without a score.  It happens all the time.  Where it can't go through committee is through the Budget Committee.  That's the next step interests process.  So, there will be a score for individuals to look at.

And that's important.

CAVUTO:  But it's sort of like buying a car after you find out that it might be a lemon.  Right?

PRICE:  Yes, but, again, that's part of the legislative process.  It's not unusual at all.

And it sometimes frustrated me when I was in the United States House.  But part of it is just the constraints that the Congressional Budget Office has itself.

CAVUTO:  I got you.

One of the things that comes up, Secretary, in this discussion, is that you tried to come up with an alternative to a law that even you said at the time -- and you were aggressively against it at the time -- was a government albatross.

And some of your conservative critics have come out to say, well, the only saving grace here is that it might be slightly less than an albatross ,that you still take care of some of the benefits that covers preexisting conditions, keeping your kids on the policy longer, giving tax-generous employer plans and examining that feature, providing certain minimal benefits.

So you do a lot of the good things that a lot of people like.  But you -- it doesn't seem that there's a clear way going forward that would make this a significant savings, that this would still be a big old government program.

PRICE:  Oh, not at all, Neil.

I disagree completely with the characterization.  This is putting power back in the hands of patients.  It's putting power back in the hands of individuals, so that they purchase the kind of coverage that they want, again, not that Washington forces them to buy.

It's returning the flexibility, the ability for the states to determine what is the right kind of program to care for their Medicaid population, their vulnerable population.  We ought not be deciding those things from Washington, because we make bad decisions when we do that.  When we centralize all of that decision-making, it means that states can't tailor something that is uniquely related to their population.

CAVUTO:  Well, I certainly understand that, sir, and I clearly was not clear there.

But one of the things, the raps against this is that, for example, older patients or older Americans could be at a disadvantage, where they could pay up to five times more than what younger patients could.  Right now, I think, with the existing Obamacare, the Affordable Care Act, it's about three times more.

So, that you actually make it more disadvantageous for folks who need that coverage the most.  You say what?

PRICE:  You have got to make insurance work.

Right now, insurance isn't working.  As I said, a third of the counties only have one issuer.  Five states only have one issuer.  We have got counties that very soon will have no insurance company offering.  This is a plan that has failed.

(CROSSTALK)

CAVUTO:  Do we still have exchanges?

PRICE:  I beg your pardon?

CAVUTO:  Are the exchanges still there?

PRICE:  Well, an exchange is just a fancy broker, really.

CAVUTO:  Right.

PRICE:  So, what will happen is that there will be brokers that will be able to offer things for individuals across this country.  And there will be greater choices.

That's the key.  If we can get choices and competition and transparency and accountability, we have got a system that then will actually work for patients, not government, work for patients.  And that's the key.

CAVUTO:  Insurance companies seem to come out OK with this.  It's a knee- jerk read on my part.

And a lot of people have had problems with insurance companies.  And they have a cynical view, as you know, Secretary, that if insurance companies are happy, I shouldn't be.  What do you say?

PRICE:  Well, what we need is competition in the insurance arena as well.

And right now the system that we have is driving down competition.  So you're seeing decreasing numbers of insurers.  Last year, there were about 240 insurance issuers, insurance companies issuing health coverage interests nation.  Now there are about 167.  That's about a third decrease, one-third decrease in one year.

Can you imagine what it's going to look like in a very short period of time if nothing is done to fix this?  This has fallen apart.  This has failed terribly.  And for the people that it's failed are the men and women out there across this country who are forced their buy insurance through this exchange.

So what we want to do is reinvigorate and revitalize that individual and small group market.  That's the way that you get choices for people.

CAVUTO:  Well, do you fear, though, or can you even guarantee here now that premiums won't still be going up at a double-digit clip?

PRICE:  No, it -- I -- I'm -- I'm absolutely certain that they will not if you take it in its totality.

Again, you can't just concentrate on the one bill that is moving through Congress right now.  You have got to look at the other bill, the phase three bill, but also the phase two opportunities that we have for the regulations here at the Department of Health and Human Services.

Again, there's hundreds of regulations and thousands of guidance letters that were put out, that many of them actually drove up, have driven up the cost of health insurance and are making it more difficult for doctors to care for patients.  That's not the business that the federal government ought to be in.

CAVUTO:  But I always see insurance companies that win on this stuff.

And I'm a little bit familiar with how this whole medical stuff works because they will always find a way to jack up their premiums.  How can you police that, or you just let capitalism do its thing?  Because sometimes what its -- its thing is not too friendly to consumers.

PRICE:  Well, it isn't when you are certainly dictating to them what they have got to sell.  But if we allow insurance companies and the folks who are providing the kind of coverage options for coverage out there, to sell what people want, what patients want, that's where you inject the competition.

CAVUTO:  So they have more flexibility and can offer more options to people, they make money doing that, and all of a sudden the need for premium hikes isn't there?

PRICE:  Then the price comes down.  Absolutely.

If you are able to purchase across state lines, if you're able to join larger insurance pools, if you're able to see the accountability and the transparency that is so necessary in insurance and the provision of coverage, the prices will of necessity come down, because that's how systems work where you actually have people and patients at the center, as opposed to government.

CAVUTO:  All right.

Meanwhile, a lot of these taxes that are part of Obamacare, they will be pushed out next year, not this year, right?

PRICE:  Well, some of them -- this is one of those dials that you have to move to make certain that it's not -- that this plan is not costing more than the current system.

And so you have just to track where the taxes go away.

CAVUTO:  Secretary, thank you for taking the time.  We very much appreciate it.

PRICE:  Thanks so much, Neil.

CAVUTO:  All right.

END

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