Alex Azar II testifies at a House Education and the Workforce hearing on HHS priorities. (Photo: House Education and the Workforce Committee) Alex Azar II testifies at a House Education and the Workforce hearing on HHS priorities. (Photo: House Education and the Workforce Committee)

The administration of President Donald Trump is still hoping to replace the current Affordable Care Act commercial health insurance subsidies with grants for states.

Alex Azar II, the secretary of the U.S. Department of Health and Human Services, talked about the ACA subsidies last week in Washington, during a hearing on HHS priorities organized by the House Education and the Workforce Committee.

The committee has posted many resources related to the hearing, including a link to a video of the hearing, here.

Azar testified that the Trump administration hopes to invest heavily in priorities such as fighting opioid abuse and making sure that participants in the Medicare Part D prescription drug plan program are getting the best possible prices.

He also talked about efforts to change Affordable Care Act programs. In February, the Trump administration included a proposal for “Market-Based Health Care Grants” in its budget proposal for 2019.

(Related: Meet Trump’s Proposed Market-Based Health Care Grants)

HHS believes that grant program will help bring down skyrocketing health insurance costs, Azar said.

“The budget proposes a historic transfer of resources and authority from the federal government back to the state, empowering those who are closest to the people and can best determine their needs,” Azar said.

Azar said the administration’s proposal for improving the individual health insurance market is based on the Graham-Cassidy-Heller-Johnson that was debated last fall.

Here are three other things Azar talked about at the hearing.

1. Affordable Care Act Cost-Sharing Reduction Subsidies

Rep. Bobby Scott, D-Va., the highest ranking Democrat on the committee, asked Azar’s decision to stop making payments for the ACA cost-sharing reduction subsidy.

That subsidy program was supposed to use federal money to help ACA exchange plan users with income under 250% of the federal poverty level pay the deductibles, coinsurance amounts and co-payments associated with their coverage, to keep high out-of-pocket costs from shutting them out of the health care system.

Republicans in the House have sued to block billions of dollars in cost-sharing reduction program subsidies, arguing that the House has never appropriated money for that program. The administration of former President Barack Obama argued that the permanent appropriation in the Affordable Care Act package for the ACA premium tax credit subsidy also applied to the cost-sharing reduction subsidy program.

The Trump administration stopped making the subsidy payments last fall, arguing that it believes it has no appropriation to make the payments.

Azar said at the hearing that Congress is to blame for the sudden end of the subsidy payment stream.

“Congress is the one that did not appropriate the cost-sharing reductions,” Azar said.

The Trump administration was close to winning support for a bipartisan deal that could have provided the funding to continue the subsidies, Azar said.

2. ACA Cost-Sharing Reduction Costs and 2019 Premiums

Even though the federal government is no longer paying subsidy money, health insurers still have to provide the subsidies, by charging other enrollees more.

Rep. Joe Courtney, D-Conn., asked Azar whether HHS could give insurers and state regulators clear regulations about how to build the cost-sharing reduction costs into their 2019 rates.

“All I’m asking for is just a clear answer from the department,” Courtney said.

Azar said, “We certainly aren’t able to regulate in time for the — ”

“ I’ll take that as a ‘no,’” Courtney said, cutting Azar off. “Hopefully that message will get out to regulators across the country.”

3. ACA Subsidy Eligibility Verification

At another point, Rep. Joe Wilson, R-S.C., asked Azar about what the Trump administration has done to address past concerns about the ability of HealthCare.gov managers to verify whether users of ACA exchange plan tax credit subsidies are really eligible for the subsidies.

Azar said he would get back to Wilson with answers on that point.

— Read also, on ThinkAdvisor: Medicare Fund Falls Short in 2026, Sooner Than Last Forecast.

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