Rand Paul: ‘We’re Going to Legalize the Sale of Inexpensive Insurance’

He said there will be no government mandate telling people they must have insurance or pay a penalty:

"So, one of the key reforms that we will do is, we're going to legalize the sale of inexpensive insurance. That means getting rid of the Obamacare mandates on what you can buy," Paul told CNN's "State of the Union."

"We are going to help people save through health savings accounts, as well as a tax credit," Paul continued. "And then one of the things that we need to talk more about -- and this is the third part of the replacement bill -- is, we're going to allow individuals to come together in associations to buy insurance."

Paul, an ophthalmologist, said he once employed four people at his doctor's office. "If one of my employees got cancer, it was devastating to the bottom line, not only to them, obviously, but to the bottom line of insurance.

"But there's no reason why someone with four employees shouldn't be able to join with hundreds and hundreds of other businesses that are small to become a large entity to get leverage to bring your prices down, but also to get insurance that can't cancel you and guarantees the issue of the insurance even if you get sick."

Paul said Obamacare failed because there were too many government mandates, which made it too expensive.

Asked what will happen to Obamacare's expansion of Medicaid, Paul said that's the "big question."

"The vast majority of people that got insurance under President Obama's Obamacare, the Affordable Care Act, got it through Medicaid," Paul noted. "So, what we have to decide is what can be kept and what can't be kept. And that's going to be part of repeal."

"But I will make this point, and this is an incredibly important point. Everybody says, oh, well, what are we going to do? We're going to give these people care. The other question is, where are we going to get the money is what I ask?

"We borrow $1 million a minute. We owe $20 trillion. We have this enormous debt. My point is, we should be honest about it. If Kentucky or Tennessee or Ohio wants to expand Medicaid, and they want -- they say you have a lot of people struggling, we're willing to help them, that's fine.

"Probably, we should then raise the taxes on everybody in Kentucky to pay for Medicaid. Instead, we had this deceitfulness that President Obama said it would be free, it would be taken care of 100 percent by the federal government. But we have no money in Washington. You know, we have a $20 trillion debt, so it's not honest accounting. So, I would say, if you want to have Medicaid, you should say, we're going to have to have higher taxes to pay for it."

Under the Affordable Care Act, the federal government said it would pay for the first three years of Medicaid expansion for states that chose to do that. The states would pick up more of the cost after three years.

In a weekend interview with the Washington Post, President-elect Donald Trump said he also has a plan to replace Obamacare with "insurance for everybody." Part of Trump's plan includes having drug companies negotiate directly with the government on prices in Medicare and Medicaid, the Post reported.

According to the newspaper, "Trump declined to reveal specifics in the telephone interview late Saturday with The Washington Post, but any proposals from the incoming president would almost certainly dominate the Republican effort to overhaul federal health policy as he prepares to work with his party's congressional majorities."

Interviewed on "Fox News Sunday," Vice President-elect Mike Pence said repeal and replace can happen at the same time, as Trump has promised.

"The president-elect made it very clear to leaders in the Congress this week that he wanted to do both at the same time. And we're very grateful the House and Senate moved resolutions this week to begin the process of repealing Obamacare," Pence said.

He said the Obamacare replacement "will lower the cost of health insurance without growing the size of debt. I would anticipate in the first 100 days that we'll deliver on that promise for the American people."