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Health and Human Services secretary Alex Azar at his swearing-in ceremony last month with President Trump and Vice President Mike Pence. Photo: Chris Kleponis-Pool / Getty Images

This might be the best way to understand the Trump administration’s approach to the Affordable Care Act: the ACA’s exchanges, like health insurance itself, relied on healthy people subsidizing the cost of covering sick people — but they’re sliding deeper into something a lot more like a makeshift high-risk pool, in which healthy people are absent and the government simply pays to cover sick people.

Where it stands: The White House and congressional Republicans are not trying to change that reality. In some ways, they have accelerated it. At a minimum, they accept it.

  • Their focus is instead on how to create a better deal for the comparatively healthy, wealthy people who aren’t interested in the exchanges. And if more people end up ditching the marketplaces as a result, well, c’est la vie.

Yesterday’s rules are another brick in the wall. Repealing the individual mandate will pull a lot of healthy people out of the ACA’s exchanges. Association health plans will pull out a few more; expanded access to short-term health plans, a few more after that.

  • On their own, yesterday's rules on short-term plans probably wouldn't wreck the market. After all, they restored what had been the status quo until 2016.
  • “I don’t think it’s going to be a huge deal, particularly in the short term,” Avalere’s Chris Sloan told me.

Between the lines: “Really, the draw into the individual market has been the subsidy,” Health and Human Services secretary Alex Azar told reporters yesterday.

  • It’s an instructive comment about how HHS sees the exchanges, and who it sees as the potential customer base for ACA coverage.
  • More than 80% of ACA enrollees receive premium subsidies. And the consumers with the biggest subsidies are the ones who are the most insulated from steep premium increases.
  • People who aren’t eligible for premium subsidies “are just not enrolling in this market,” Sloan said.

The bottom line: All of this leaves the exchanges as a de facto home for people who really need coverage for preexisting conditions and who are poor enough to be shielded from the rising cost of that coverage. Rather than try to balance that group out by bringing more healthy people into the mix, HHS is just moving on, trying to create new options for healthy people.

Go deeper

51 mins ago - Politics & Policy

Manchin's massive means test

Illustration: Aïda Amer/Axios

Sen. Joe Manchin (D-W.Va.) is offering progressives a trade: He'll vote for their cherished social programs if they accept strict income caps for the recipients, people familiar with the matter tell Axios.

Why it matters: Manchin’s plan to use so-called means-testing for everything from paid family medical leave to elder and disabled care would drastically shrink the size and scope of the programs. It also would bring a key moderate vote to the progressive cause.

The China whisperer

Nick Burns. Photo: Chen Mengtong/China News Service via Getty Images

President Biden's nominee for ambassador to China will face aggressive questioning Wednesday about the most important, and potentially perilous, bilateral relationship in the world.

Why it matters: While Nick Burns is an experienced diplomat with support on both sides of the aisle, lawmakers want to use his confirmation hearing to force the administration into some tough positions on China.

Jan. 6 committee recommends contempt charges against Bannon

Steve Bannon. Photo: Stephanie Keith/Getty Images

The House select committee investigating the deadly Jan. 6 Capitol riots unanimously approved a resolution Tuesday night recommending that former Trump aide Steve Bannon be held in contempt of Congress for refusing to comply with a subpoena.

Why it matters: The resolution sets up a House vote to refer Bannon for potential criminal prosecution, signaling that the committee will not tolerate attempts by former President Trump and his associates to stymie the investigation.

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