Health and Human Services Secretary Alex Azar defended President Trump’s push to let Americans ditch Obamacare for cheaper, skimpier plans, saying President Barack Obama kept the same policy for most of his tenure and subsidized customers are unlikely to flee the program’s exchanges en masse.
Mr. Trump wants to let Americans hold onto “short-term” insurance plans for a full year, reversing the three-month cap that Mr. Obama imposed in 2016 and sparking Democratic fears that people will blindly opt into “junk” insurance and further deplete Obamacare’s wobbly markets.
Mr. Azar said those fears are overblown.
More than eight in 10 exchange customers receive subsidies, so they’re unlikely to forfeit them by leaving the exchanges, and short-term plans with fewer benefits are “not going to be right for everybody,” he told the Senate Appropriations Committee.
“What’s been proposed on the short-term plans is to restore what President Obama had in place until the eve of his retirement from office,” Mr. Azar said. “We’re just trying to make options available.”
He also said the GOP’s decision to zero out penalties tied to Obamacare’s “individual mandate” to hold insurance will have little real-life effect — breaking with his predecessor, Tom Price, who recently suggested costs in the 2010 program could rise due to the change, though Mr. Price tried to walk those comments back.
“I really do not believe that it will not have a significant impact on our risk pool,” Mr. Azar testified.
Flaws within Obamacare itself fueled a multiyear campaign to repeal and replace the law, yet Republicans failed spectacularly last year, leaving Mr. Trump to explore alternatives on his own.
Democrats are trying to flip the script before the midterm elections, saying Republican “sabotage” is to blame for any sticker shock voters see. Insurers in Maryland and Virginia recently requested another round of double-digit rate hikes for 2019, citing in part the shifting winds out of Washington.
The administration hasn’t finalized its regulation on short-plans, but will soon.
The plans don’t have to offer Obamacare’s full set minimum benefits, such as maternity care, or charge people with pre-existing conditions the same as others. Healthier people may decide those skimpier plans are a better fit than Obamacare’s more expensive plans, leaving a costlier marketplace in the exchanges.
“I’m very worried, Mr. Chairman, about the separation of the market into the very healthy and very sick as these short-term plans become true, viable options right next to the exchanges,” Sen. Chris Murphy, Connecticut Democrat, told Sen. Roy Blunt of Missouri, who leads the Appropriations Committee’s panel on health.
The administration says the real problem is mandates and regulations that forced healthier people to cross-subsidize sicker persons in the risk pool, leading to unsustainable prices for people who don’t qualify for taxpayer assistance.
Senate Health Committee Chairman Lamar Alexander said Democrats had the chance to bring down premiums through a bipartisan bill that would have funded “cost-sharing” payments to insurers and billions in “reinsurance” to subsidize pricey customers, yet they balked over language that barred the funds from subsidizing plans that cover abortion.
“It wouldn’t have changed essential health benefits, it would’ve allowed coverage for pre-existing conditions, no lifetime limits — and the Democrats blocked it,” he said Thursday. “So that’s a difference of opinion we have about who’s responsible for the high rates which are coming because of Obamacare.”