President and HHS secretary target prescription drugs, Obamacare, Medicare for all
President Trump’s visit to the Department of Health and Human Services Thursday is the latest move in his administration’s fight to lower prescription drug costs, increase choice and flexibility within health plans offered under the Affordable Care Act aka Obamacare, and defeat progressive calls for Medicare for All.
The president’s point man in these efforts is Secretary of Health and Human Services Alex Azar, who replaced Tom Price last January. An attorney with extensive experience both within government and the pharmaceutical industry, Azar is advancing the Trump health agenda along multiple fronts.
When President Trump’s recent USA Today op-ed on health care and democratic socialism came under fire from many in the media, it was Azar who provided cover.
Much of the president’s criticism was directed at Medicare for All, a proposed overhaul of the health care system supported by a large number of congressional Democrats. Trump argues that “Medicare for All” is a misnomer for what in reality would be a “government-run, single-payer health care system” with a possible price tag of $32.6 trillion over 10 years.
The president contends that such a scheme would be especially detrimental to seniors, who “would no longer be able to depend on the benefits they were promised” and would see their health care decisions left to Washington, D.C., bureaucrats.
Azar agrees with the president’s assessment, labeling “Medicare for All” a euphemism for “a single government system for every American that won’t resemble Medicare at all.” Such a proposal offers no promises that one can keep their health care plan or their doctor but would take away choices in health care.
Under some version of “Medicare for All,” employer-based insurance plans could be banned overnight. Even in other versions, where employer insurance survives, Azar argues that “the access it provides to top quality doctors will be restricted to the elite few.”
There is also no guarantee one’s doctor would accept the new insurance given that everyone would be on a plan that pays Medicare rates that are lower than what private insurance pays.
“Do you think the best doctors will stay in that new system—rather than moving to just accepting cash?” Azar asked while delivering remarks in Nashville last month.
Azar acknowledges the current system is imperfect: “Higher payments from commercial insurers help doctors take on seniors whose Medicare plans pay less.”
But he also points out that a single-payer system would “completely unravel” the current system, “without a theory for how seniors’ access would be protected.”
Furthermore, for seniors participating in Medicare Advantage, “Medicare for All” would significantly alter their current health care situation. Under Medicare Advantage, seniors purchase a private insurance plan with government support. About one-third of Medicare enrollees are on private plans and that number has been increasing in recent years.
“Seniors are showing with their own choices that they want to move forward, toward a system with lower costs and more choice,” argues Azar.
Meanwhile the Trump administration has taken steps to stabilize premiums and make changes within the system established by the Affordable Care Act.
“Obamacare is broken. It cannot be fixed,” Azar told the Washington Free Beacon in a recent interview.
Nevertheless, the administration is trying to make the ACA work better until, or if, it is repealed. Earlier this week, the administration announced it will give states new abilities to opt out of Obamacare requirements.
Azar has highlighted actions by the Trump administration to stabilize insurance premiums. On his first day in office, the president signed an executive order “to run the ACA as efficiently as possible, give states more flexibility, and minimize the costs the law imposed on Americans.”
The Department of Health and Human Services also proposed a “market stabilization” rule within a month of Trump taking office.
In the wake of these and other actions, Azar announced last month that “the premium for a benchmark federal exchange plan is projected to actually drop,” and the number of federal exchange insurers will increase for the first time in three years.
Premiums for the “benchmark” silver health care plan will drop by 2 percent next year.
The administration has also tried to provide more affordable health care options by expanding access to short-term, limited duration insurance plans that are much cheaper than ACA-regulated plans.
Azar has pointed out that repealing the individual mandate not only did not destroy the law, but also did not hinder administration efforts to expand health care options and stabilize premiums.
Finally, the Trump administration has tried to increase price transparency as part of a broader effort to lower the cost of prescription drugs. “It’s a top priority for the president and for me,” Azar told the Free Beacon.
Increasing competition has been one component of the administration’s strategy to lower drug costs, particularly through expedited approval of drugs by the Food and Drug Administration. Additionally, HHS is working to keep a closer eye on list price increases in order to hold manufacturers accountable.
Last week, Azar announced a new proposal from the administration to require drug companies to include the list price of any drug paid for by Medicare or Medicaid in their television advertising.
According to an HHS report from earlier this year, there were 60 percent fewer brand-drug price increases between May and August 2018 than there were in the same period last year. There were 54 percent more generic and brand-drug price decreases in that period this year as compared with last year.
The administration’s push for price transparency has not gone without criticism.
A Wall Street Journaleditorial from last week argues that the new rule presents legal problems. Noting that HHS admits Congress has not given it explicit authority to compel disclosure of list prices, the editorial says the promulgation of the new rule “looks like a throwback to the Obama years: Select a desired policy and then hunt for a broad statute to justify it.”
Azar rejects these arguments, saying the regulation is within the president’s authority and that auto dealers have been required to list sticker prices for decades without harmful effects on the industry.
And Azar has an advantage in the Trump administration’s campaign against high prescription drug costs: As a former Eli Lilly executive, he already knows the industry’s arguments—and how to rebut them when necessary.