Former health secretary predicts Trump will bring in block grants for Medicaid

Former health secretary Dr Tom Price said he expects the incoming Trump administration to try to allow skinnier insurance plans and institute block grants for Medicaid.

Such changes would leave Americans with less expensive insurance plans that cover fewer health conditions, and strike at the heart of Medicaid, a foundational safety net program that insures 69 million low-income Americans, nearly half of whom are children.

The predictions could be a preview of the conflict between the longtime Republican instinct to cut regulations and social safety nets and Donald Trump’s promise to tackle corporate malfeasance and the chronic diseases strongly associated with poverty.

“I wouldn’t be at all surprised if there [were] discussion for allowing a state, if it wanted to, to block grant Medicaid and put in place other options in the Medicaid system to cover more individuals in their state,” said Price in an exclusive interview with the Guardian. “I wouldn’t be at all surprised if that were to happen.”

The comments come as Trump prepares to enter the White House a second time with a promise to tackle America’s chronic disease epidemic and reign in food, chemical and pharmaceutical companies.

“The president-elect clearly is an advocate for innovation,” Price told the Guardian. And “decreasing regulation to incentivize that innovation … would, I think, be something that would be very attractive for the incoming administration”.

Price also alluded to the pharmaceutical industry’s power to sway lawmakers and bureaucrats as the largest single lobbying industry in the country. Thus far in 2024, the pharmaceutical industry has spent $293m on lobbying, according to Open Secrets, far more than the next most generous industry (electronic manufacturing at $189m).

“The entities working on pharmaceuticals are fully capable of being able to make certain the incoming administration is aware of their needs and concerns so innovation can continue,” Price said.

Price is an orthopedic surgeon who served as Trump’s first health and human services (HHS) secretary from February to September 2017. The department employs more than 80,000 people and is the umbrella agency for the world’s foremost public health and scientific agencies, from the Centers for Disease Control and Prevention to the Food and Drug Administration.

Like many of Trump’s first-term cabinet members, his tenure was historically short – 232 days. Price resigned amid a scandal over his use of taxpayer money to charter private flights. Aviation experts estimated the cost of his travel at more than $400,000.

At the time he was picked for the job, Price had served in Congress for 12 years as a representative of Georgia. He was a staunch opponent of Obamacare. His resignation came soon after the spectacular failure of Trump’s attempt to “repeal and replace” Obamacare, tanked by then-Republican senator John McCain.

Price’s professional work is significantly less high-profile today. He said he had no interest in an appointment to the incoming Trump administration and was focused on raising his grandson. He also serves on public and private advisory boards, such as for a private equity-backed behavioral healthcare company and a medical marijuana company.

Price was replaced by Alex Azar, a pharmaceutical executive who served through the Covid-19 pandemic and oversaw Operation Warp Speed, the federal government’s effort to produce and distribute a Covid-19 vaccine.

“From the incoming administration’s standpoint they didn’t talk a whole lot about healthcare in the campaign,” said Price. But it signaled it was interested in “transparency and competition and choices”.

“If I’m looking at the ACA and thinking about what might happen, I’m thinking those three principles might be used,” said Price.

Traditionally, Republicans have used the terms transparency, competition and choice to describe insurance markets that have fewer regulations and are permitted to offer less, and therefore less expensive, coverage. More recently, there has also been bipartisan support for legislation supporting health price transparency, even though it is only expected to have a tiny impact on prices.

Opponents of this deregulatory philosophy argue most health services are not shoppable like a mattress or car – either because they are specialized, sophisticated or emergent. Opponents argue offering skinny insurance plans is likely to result in more medical debt, since few Americans understand their insurance and increases in cost-sharing already mean most people who owe medical debt to hospitals are already insured.

Before Price was confirmed as health secretary, many health advocates objected to his appointment because of his opposition to both Obamacare and LGBTQ+ rights. When he was a congressman, his district suffered from high rates of drug overdoses and HIV infection.

Price was also a member of the American Association of Physicians and Surgeons, a group founded to oppose socialized medicine and known to produce papers with unfounded claims, such as HIV/Aids denialism.

However, Price’s nomination and tenure looks traditional compared to Trump’s current pick for HHS secretary now – the vaccine skeptic and conspiracy theorist Robert F Kennedy Jr.

Kennedy has made a long career out of spouting unfounded health claims. He promoted the anti-parasitic medication ivermectin as treatment for Covid-19 despite evidence it harmed people; tied anti-depressants to school shootings; and questioned whether HIV causes Aids. And, where Price publicly received a flu shot, Kennedy is the nation’s leading vaccine skeptic, spreading the repeatedly debunked claim that vaccines are linked to autism.

Kennedy has appealed to many Americans with promises to tackle the nation’s chronic disease epidemic, child health and promotion of wellness trends such as raw milk. It is unclear how Kennedy will tackle chronic disease when so many of his stated beliefs clash with scientific evidence, as he serves in an administration averse to regulation, and amid promises from Trump to unleash the kind of oil and gas drilling that is known to be toxic to human health (“Drill, baby, drill”).

“When he’s confirmed he’ll have a great opportunity to learn from and learn the position of folks that are in the department and experts,” said Price. “I don’t think the sky is falling.”

Kennedy’s nomination has also drawn the ire of Democratic-leaning health advocacy groups. According to Politico, more than 200 people from dozens of groups held a phone call this week to oppose his nomination, describing the effort as a “Stop RFK War Room”.

With no prospect of a third Trump term, Price said the administration will have a relatively short four-year runway to make reforms to the health system.

“It’s so difficult to put in place public policy that changes things markedly in a short period of time,” said Price. “It requires consensus.”