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Analysis

Azar Praises Trump for 2% Drop in Premiums for 2019

By Steven Porter  
   September 28, 2018

The premium for a benchmark ACA plan on the federal exchange is projected to drop 2% nationally next year, bucking a trend of year-over-year increases for the first time in the ACA era.

Health and Human Services Secretary Alex Azar fawned over President Donald Trump's healthcare policy leadership during a speech Thursday to the Nashville Health Council, arguing that the current administration deserves credit for cleaning up the Affordable Care Act's aftermath.

"It turns out, when you have a president who's willing to take decisive action, who understands business, who's willing to work with the private sector, you can find a way to help American patients, even within a failed system like the ACA," Azar said in his prepared remarks.

As evidence of the Trump administration's progress, Azar announced that the premium for a benchmark ACA plan on the federal exchange is projected to drop 2% nationally next year, bucking a trend of year-over-year increases for the first time in the ACA era.

When asked for documentation of the analysis supporting Azar's announcement, an HHS spokesperson directed HealthLeaders to the preliminary rate filings available online and said final information will be announced by the Centers for Medicare & Medicaid Services "in the coming weeks."

There's a simple reason why we're seeing premiums stabilize as we head into 2019, said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation (KFF). Insurers raised their rates more than necessary for 2018 in response to market uncertainty caused by regulatory actions taken by the Trump administration, he said.

Analysis by KFF found that benchmark ACA premiums, excluding tax credits, rose 32% on average last year for a 40-year-old beneficiary.

"Insurers in the exchange are quite profitable right now because they overshot so much in their premium increases for this year," Levitt, a former health policy advisor to President Bill Clinton, wrote in a series of tweets Thursday.

The foundation has been tracking preliminary 2019 rate filings as well.

An HHS official said Friday that the facts refute Levitt's claims. The official referred back to several lines from Azar's speech in Nashville to argue the Trump administration has made lemonade of the less-than-ideal circumstances created by Congress and the prior administration:

  • On cost-sharing reductions: The administration halted cost-sharing reduction (CSR) payments last October, contending that Congress had failed to appropriate funds for the payments. Azar called this move "bold action to fix a lawless situation." Critics have cited the halted CSR payments among the administration's efforts to undermine the ACA. Levitt said the decision was "ironically" among the most stabilizing actions Trump's team has taken.
     
  • On risk-adjustment rules: Critics objected when the Trump administration froze risk-adjustment payments on a Saturday in July in response to a federal court ruling from months earlier. The payments were unfrozen less than three weeks later—"it was President Trump who issued an emergency regulation to fill the void," Azar said Thursday.
     
  • On repeal-and-replace: There's only so much the executive branch can do without action by lawmakers, Azar added: "The ACA is not 'fixed' or even 'fixable' without Congress’s repealing and replacing it."
     

Azar used his speech to liken the ACA to the concept of "Medicare for All," which some liberal policymakers have proffered as a solution to the nation's healthcare woes. He trashed them both.

"Advocates of Medicare for All are looking backward—not just by repeating the flaws of the Affordable Care Act," he said, "but also by trying to impose a payment system designed in the 1960s on all of American healthcare."

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Full and final analysis on 2019 premiums will be released by CMS 'in the coming weeks.'

It's important to remember that the stabilization follows a significant premiums increase in 2018.

Azar said the Trump administration has made the most of less-than-ideal circumstances.


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