HHS chief takes Heritage Foundation stage to bash ACA, plug administration's programs.
This article first appeared July 26, 2018 on Medpage Today.
By Shannon Firth
WASHINGTON -- Health and Human Services (HHS) Secretary Alex Azar, JD, described the free-market principles driving the Trump Administration's approach to healthcare policy at a briefing hosted by the Heritage Foundation on Wednesday.
Specifically, Azar celebrated the expansion of alternatives to Obamacare, such as association health plans; doubled down on the administration's commitment to work requirements -- despite a federal court decision rejecting the idea -- and plugged the administration's new blueprint for lowering drug prices.
Azar likened President Trump's economic philosophy to that of former President Ronald Reagan, who summed up the failures of the big government approach to the economy this way: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
"When things don't work the way they should ... often the culprit is government action," Azar said, citing the lack of digitization in the healthcare field as one example.
"The Trump administration's first instincts are the opposite of the big government nightmare that President Reagan described."
Azar noted that, in some cases, the government must intervene to correct past wrong-headed approaches.
"Always, however, our actions will be aimed at building markets and competition restoring price signals and incentives and empowering consumers through choice, rather than having government decide what is best for the individual," he said.
He went on to list a handful of health policy priority areas where he felt these free-market principles were most relevant: reforming the individual insurance market, curbing high drug costs, and rethinking the Medicaid expansion.
Obamacare's Flaws
In speaking about the individual insurance market, Azar blasted the Affordable Care Act, for "creat[ing] a thicket of subsidies, regulations, and taxes," while failing to expand private coverage and to lower costs. From 2013 to 2017, individual premiums more than doubled in 39 states, he said.
Azar also took aim at the ACA's age-rating mechanism -- currently, older Americans can be charged only three times what a younger American can for premiums -- saying it forces young people to foot the bill for older adults.
"Congress created this broken system, and it's going to take an act of Congress to fix it," he said.
In continuing the theme of bashing Obamacare, Azar also slammed the Medicaid expansion and extolled the promise of community engagement.
Azar also spoke of Medicaid expansion extending health insurance to "able-bodied adults."
Under the ACA, the government pays more to ensure healthcare coverage for these newly covered individuals than for the "traditional, vulnerable, Medicaid populations" -- e.g. low-income mothers, children, and the disabled.
"Supporting legislation to undo those perverse incentives is a priority for this administration," he said.
In the meantime, HHS has encouraged states to pursue work requirements or "community engagement activities" -- provisions requiring that "able-bodied" adults, with some exceptions, demonstrate that they are working, in school, engaged in child care, or volunteering in order to enroll in Medicaid.
In June, a federal judge blocked work requirements sought by Kentucky's Medicaid program.
"We suffered one blow.... We are undeterred," Azar said of the judge's decision and HHS's commitment to work-requirement provisions.
More than a dozen states have applied for Medicaid waivers to enact such changes.
Alternatives to ACA Plans
In spaces where HHS can independently intervene to reshape the individual market unilaterally, it has, he noted.
Azar also touted the Trump administration's proposed rules to expand access to short-term health insurance policies that cost one-third of Affordable Care Act plans. Critics view such insurance as "junk plans" and argue that making them more available would bifurcate the health insurance market, making premiums unaffordable for older and sicker patients who need conventional full-coverage plans.
Azar also praised the Department of Labor for increasing access to association health plans, intended to help small businesses to buy group health insurance.
He touched briefly on the president's 2019 budget, which continues to call for ACA repeal and for replacing all of the Obamacare subsidies and the Medicaid expansion with block grants.
This idea and its variations, while trumpeted by many conservative think tanks -- including the Heritage Foundation -- has so far failed to win a majority in Congress.
Curbing Drug Prices
Looking beyond the individual market, Azar turned his eye to drug prices, claiming there is no "real market" for prescription drugs in the U.S. because of the maze of relationships between drugmakers, insurers, and pharmacy benefit managers that seek to squelch price-based competition.
Azar said that HHS has the authority to right this flawed system by closing regulatory loopholes.
Lastly, the Secretary highlighted his decision last week to direct the FDA to establish a working group that would explore the idea of importing drugs from other countries to address "patient access problems caused by spikes in drug prices."
The announcement, he noted, "took some by surprise." (Azar had previously criticized the idea of drug importation as a "gimmick.")
But he stressed that he and the president had been clear in launching their blueprint to curb drug costs: "We are open to all solutions that put American patients first -- meaning [ideas that] are safe, effective, and respectful of patient choice and the incentives that drive American innovation."