June 8, 2018

In This Issue
Fast Facts
Senate Cancels Majority of August Recess to Focus on Judicial Nominations
HHS Secretary Testifies on Agency’s Priorities and Market Stability Regulatory Efforts
House Holds Hearing on HSA Improvements
NAHU’s Healthcare Happy Hour Unpacks a Week of Hearings, Announcements and Primaries
Garden State Passes Individual Mandate after Administration Zeroes out Penalties
Register Now for the “Live from NAHU” Webinar on June 21
HUPAC Roundup
What We’re Reading
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HHS Secretary Testifies on Agency’s Priorities and Market Stability Regulatory Efforts

The House Education and the Workforce Committee held a hearing on Wednesday with HHS Secretary Alex Azar on a wide-ranging set of issues, including the upcoming open enrollment period (OEP) for the marketplaces, forthcoming regulations on association health plans (AHPs) and short-term plans (STPs), as well as the department’s fiscal year 2019 budget. The secretary focused much of his remarks on the agency’s priorities to reduce the regulatory burden and the need to reduce the costs of healthcare, particularly with regards to prescription drug prices, which is among HHS’s leading priorities following the release of the “America First” prescription drug plan.

With regards to the ACA’s sixth open enrollment period set to begin this fall and stabilizing the marketplaces, Secretary Azar stated that the increasing premiums are due to the fundamental structure of the ACA that provides no incentives for insurers to contain costs. He stressed increasing competition and availability of plan options, but that there is little regulatory authority to halt premium increases. Azar further noted that the Trump Administration has no plans to bar silver-loading by insurers who have increased silver-tier plans in response to the elimination of the ACA’s cost-sharing reduction (CSR) payments.

The decision last October by the Trump Administration to no longer fund the CSR program resulted in insurers increasing premiums either across the board, or exclusively on silver-tiered plans, as this would both minimize the impact to all other metallic plans while increasing the federal subsidies available to silver-tiered plans, in some cases making them available with no premiums. Secretary Azar noted during the hearing that the administration will not block insurers from silver-loading for the upcoming year as doing so would require new regulations and they have no plans to do so ahead of the beginning of the upcoming OEP. However, Azar did say that the agency is looking at doing so for future years.

Secretary Azar also addressed the forthcoming regulations on AHPs and STPs. In his remarks, Azar stated that the administration is focused on restoring the duration of STPs to those that previously existed under the Obama Administration, prior to the regulation issued late in his presidency that restricted these plans to just three months. Azar stated, “these plans are for people in transition from one employer sponsored healthcare plan to another, to provide a bridge for people that have a gap in employment, and for people who simply can’t afford anything in the ACA market and they don’t qualify for Medicaid.” Azar claimed that both the AHP and STP policies would reduce the costs of obtaining insurance for the 28 million individuals who remain uninsured.

Several questions were asked regarding the cost of care, including the impact of zeroing out the ACA’s individual mandate penalties, beginning in 2019. Azar disputed estimates showing increasing costs for consumers because of this policy, stating that it is only one view and set of estimates, and not the position of the administration. Another question dealt with provider consolidations, which Azar blamed on the regulatory environment created in the wake of the ACA, stating “Any aspect in which our payment rules encourage integration and purchasing should be done as a matter of economics and not as a matter of our payment policies.”

Azar promoted the Trump Administration’s prescription drug reforms, stressing that they are working to reduce the list prices of drugs. He specifically called on Congress to overturn the 100% cap on rebates in the Medicare program, deriding it as a gift by the ACA to the pharmaceutical industry. With regards to overall healthcare spending, Azar outlined a four-part agenda geared at improving the value-based healthcare: genuinely interoperable health information technology, transparency of price and quality, using the power of Medicare and Medicaid to drive fundamental change in the system, and removing government barriers to coordination and integration of care delivery.

In addition to these issues, Secretary Azar also addressed numerous other healthcare issues, including: the opioid epidemic, neo-natal abstinence syndrome, abortion restrictions, cuts to Medicare and Medicaid, immigration policies and children, rural health, the Medicare Wage Index, early child care and education, the CMS scorecard, healthcare consolidation, electronic health records, and Medicaid work requirements.

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