Political News

Health Secretary Denies Sabotaging Insurance Markets

Posted June 6, 2018 9:12 p.m. EDT

WASHINGTON — Alex M. Azar II, the secretary of health and human services, denied on Wednesday that Trump administration policies were driving up health insurance costs, which many experts expect to surge again in 2019.

Azar, testifying before a House committee, vigorously disputed suggestions by Democrats that President Donald Trump had sabotaged Affordable Care Act marketplaces, where millions of people obtain insurance subsidized by the federal government.

In the market as it now exists, he said, “there’s no incentive for insurance companies to in any way contain their cost increases” because federal subsidies generally rise along with premiums.

“Those prices are going to go up, and, absent statutory change, there’s little we can do to stop that premium increase because the subsidies chase those premiums,” Azar said.

The Congressional Budget Office said the full unsubsidized premium for a benchmark midlevel plan in the marketplaces rose 34 percent this year, on average, and was likely to increase about 15 percent next year. But some insurers have already requested rate increases of more than 30 percent for 2019.

Given this dynamic, Azar said, the Trump administration is trying to “make other options available to people” — less expensive insurance that will be exempt from many coverage requirements of the Affordable Care Act.

Trump intends to expand access to “short-term, limited-duration” insurance, allowing such policies to run for 364 days, instead of the current limit of three months. In addition, he is making it easier for businesses to band together and provide insurance through “association health plans.”

Critics say the new plans would attract healthier people — and employers with younger, healthier workers — driving up costs for those who remain in the Affordable Care Act marketplaces. The new plans would not have to provide certain “essential health benefits” like mental health care, emergency services, maternity and newborn care and prescription drugs.

“Association health plans will actually bring down the cost of insurance,” Azar said.

Insurers and consumer advocates say Trump’s efforts to undercut the Affordable Care Act have created uncertainty for insurers, causing some to withdraw from the public marketplaces.

“I have not heard that, nor do I believe it’s accurate,” Azar said. “There are many major providers that are providing insurance packages and frankly making a ton of money off of providing in the Obamacare markets.”

Rep. Nancy Pelosi of California, the House Democratic leader, cited news reports indicating that insurers around the country were using Trump administration policies to justify 2019 rate increases in Maine, Maryland, New York, Pennsylvania, Vermont, Virginia and Washington, among other states.

In seeking higher rates for 2019, insurers point to several developments. Trump cut off subsidies that insurers use to reduce out-of-pocket medical costs for low-income people. And Congress, with encouragement from Trump, eliminated tax penalties for people who go without insurance, starting next year, giving healthier people less incentive to obtain coverage.

“These steps destabilize the health care system and will increase costs and undermine patient protections for millions of Americans,” said Rep. Robert C. Scott of Virginia, the senior Democrat on the Education and Workforce Committee, where Azar testified.

Azar did announce one policy that is likely to help consumers and insurers. He said the administration would, in effect, allow insurers to continue shifting certain costs to the federal government — because officials did not have time to issue rules banning the practice in 2019.

To offset the loss of federal “cost-sharing” payments, many insurers increased premiums this year. State officials in many states told them to load all the increase onto midlevel “silver plans,” because the federal government uses the cost of such plans as a benchmark in calculating premium subsidies. Those subsidies made insurance much more affordable, because they covered most or all of the premiums for many people this year.

Administration officials had expressed concern about the practice and considered banning it.

But Azar said, “We certainly are not able to regulate in time for the plan year” that starts in January.

He also defended the administration’s decision to allow states to impose work requirements on low-income people covered by Medicaid. The requirements do not have to be onerous, he said, as work can be just “volunteering, studying, education or workforce training.”

Azar also came under attack from Democrats over the administration’s recent policy of separating immigrant parents from children when they cross the border illegally. His department often takes custody of children whose parents have been arrested while trying to do so. The department then arranges education and health care for the children and may try to place them with relatives or other adults.

“I join the millions of people across this country who are appalled at the policy of ripping children away from their parents,” said Rep. Suzanne Bonamici, D-Ore.

In response, Azar said: “Individual children are separated from their parents only when those parents cross the border illegally and are arrested. We can’t have children with parents who are in incarceration.”

“The best advice I have is: Actually present yourself at a legal border crossing and make your case,” Azar added. “Cross illegally and get arrested, and your children will be given to us. That’s the simple fact, I’m afraid.”