Health and Human Services Secretary Alex Azar pushed back on criticism that new rules to expand access to cheaper plans are part of a campaign to “sabotage” Obamacare.
Azar said that Obamacare is “fundamentally flawed,” and that Congress needs to repeal and replace it. New efforts to expand the duration of short-term plans and access to association health plans, he said, will not cause people to flee Obamacare’s exchanges, as numerous experts have predicted.
“The ACA is sabotaging itself by its own structure,” Azar told reporters on Wednesday.
The administration on Wednesday finalized a new regulation that expands the duration of short-term plans from 90 days to 12 months. A short-term plan is cheaper than a plan sold on Obamacare’s insurance marketplace on the individual market because it can offer fewer benefits than an Obamacare plan.
[Opinion: Obamacare is now optional]
A short-term plan also does not have to provide coverage for people with pre-existing conditions, a key requirement of plans sold on Obamacare’s marketplaces. The plans have existed since the 1990s but an Obama administration-era regulation in 2016 changed the duration from 12 months to ninety days.
The new regulation on Wednesday reverts the duration to 12 months and lets them be renewed for up to three years. The regulation comes after the Trump administration finalized another rule to expand access to association health plans, which allow small businesses and individuals to band together to purchase insurance that also does not have to abide by Obamacare’s quality requirements.
Azar said both of the rules are about providing choice for consumers, especially Obamacare customers who don’t get income-based subsidies that lower premiums.
“With short-term plans, these are options for people in transition who don’t have employer insurance who the [Affordable Care Act] have crowded them out in terms of availability,” he said.
Azar also doubts that the plans will affect enrollment on Obamacare’s marketplaces, where 87 percent of customers get a subsidy.
“I don’t believe people will leave that market to join into the short-term, limited duration plans,” he said.
But critics and experts charge that both short-term and association health plans will cause a massive destabilizing effect on Obamacare’s marketplaces on the individual market, which is used by people who don’t get insurance through a job or the government.
The American Academy of Actuaries said Wednesday that the short-term plan rule, alongside the zeroing out of the individual mandate’s financial penalty starting in 2019, will “likely lead to some younger and healthier individuals moving away from ACA-compliant coverage.” This will lead to a spike in premiums, it added.
Democrats and Obamacare allies charge the plans were released on purpose to destabilize Obamacare and make it easier for Congress to repeal it.
“With this latest act of health care sabotage, President Trump is once again putting millions of people nationwide who have pre-existing conditions at risk of being priced out of coverage they can afford or denied coverage altogether,” said Sen. Patty Murray, D-Wash., a member of Senate Democratic leadership.
While Azar said that the move was not intended to sabotage Obamacare, he did say that the long-term vision for the Trump administration is to repeal and replace the healthcare law.
Until Congress repeals the law, he said, he will try to transform the system “to make insurance as private-sector as possible, as affordable as possible, as state-choice based as possible and present as many options to individuals as possible.”
