Health and Human Services Secretary Alex Azar declined Wednesday to commit to protecting Obamacare from companies that are testing the bounds of the law by floating cheaper plans that flout federal requirements.
Mr. Azar said he will, however, keep the “rule of law” in mind once an Idaho plan to skirt some of the Affordable Care Act’s consumer protections comes across his desk.
“I’m not aware that our opinions or views have been solicited on that question yet,” Mr. Azar told the House Ways and Means Committee. “Of course there are rules, and there’s a rule of law that we need to enforce.”
Blue Cross of Idaho recently submitted five “Freedom Blue” plans to state regulators that are cheaper than what consumers are finding on the web-based exchange set up by the Affordable Care Act. The company was moving to meet Gov. C.L. “Butch” Otter’s challenge to give cheaper options to young and healthy consumers.
The proposed plans could charge higher premiums on people with preexisting medical conditions and cap claims at $1 million per year — things not permitted under Obamacare.
That’s shaping up as a key test for the Trump administration, which still wants to repeal and replace Obamacare but is responsible for enforcing the 2010 law while it remains on the books.
If officials in Boise are allowed to plow forward, it could open the door for other red states to follow suit.
“HHS is obligated to enforce ACA insurance rules if a state is not, and what Idaho is doing seems clearly at odds with the ACA,” said Larry Levitt, senior vice president at the Kaiser Family Foundation.
State officials said the cheaper, off-exchange plans are designed to complement Obamacare-compliant plans.
But Democrats and analysts say the plan could siphon healthy customers out of the Obamacare program, upending the economics which had counted on those people to subsidize the rates for sicker Americans.
“Subsidies will protect lower-income people, but middle-class people with pre-existing conditions will bear the brunt of premium increases,” Mr. Levitt said.
Dave Jeppesen, executive vice president at Blue Cross Idaho, said that’s already happening.
“I can’t speak for my competitors, but I will say there is general acknowledgment there is a massive migration of healthy folks leaving the exchange,” he said.
He said their plans are a chance to bring up to 110,000 middle-class, uninsured Idahoans back into the market by giving them affordable options that meet their needs.
Executive said the Freedom Blue plans will still offer much of what’s covered in Obamacare plans — for instance, four of the five cover maternity services — and that any customer who hits the $1 million cap will be eligible to seek a different plan on the exchange.
Mr. Azar was on Capitol Hill — his first appearance since being sworn last month — to defend Mr. Trump’s 2019 budget.
That blueprint urges Congress to revive a plan that would gather money spent on Obamacare and siphon it back to the states in the form of block grants. The plan failed to gather enough GOP votes last year to overcome blanket Democratic opposition.
Republican leaders in Congress say they’re not eager to get burned by another repeal-and-replace debate ahead of November’s elections, so they’re eyeing incremental changes to the health law, such as tweaks to costly entitlement programs or repeal of Obamacare’s mandate requiring large employers to provide coverage or pay fines.
In the meantime, Mr. Azar said he is also eager to work with states who request workable changes to their individual markets. He cited Alaska, which implemented a reinsurance program to subsidize extra-pricey patients, so other consumers don’t have to pay higher premiums.
“We want folks to have access to affordable health care insurance,” Mr. Azar said.
Obamacare’s defenders say the Idaho plan skirts the law completely, however, so HHS must act to preserve hard-won consumer protections.
“It’s cruel, and it’s an illegal attempt to repeal our health care,” Save My Care, a pro-Obamacare coalition, says in new ads running in Boise, Idaho, and the nation’s capital. “Call Health and Human Services Secretary Alex Azar. Tell him to block Gov. Otter’s attack on our health care.”
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