Reprinted from AIS's HEALTH REFORM WEEK, the nation’s leading publication on the business implications of the massive changes for the health industry mandated by reform.
By Neal Learner, Editor
May 6, 2013 Volume 4 Issue 9
Despite withering attacks from virtually all Republicans and growing concerns from some Democrats, the Obama administration remains steadfast in asserting that the health insurance exchanges will be ready for business come October.
President Obama and top officials from HHS are pushing back against critics — including those in their own party — who claim efforts are lagging in the monumental effort to implement the marketplaces in all 50 states and the District of Columbia. Late last month, Senate Finance Committee Chairman Max Baucus (D-Mont.), a key architect of the Affordable Care Act (ACA), created a brouhaha after claiming he sees “a huge train wreck coming down” as the exchanges prepare to start enrolling members on Oct. 1.
HHS Sec. Kathleen Sebelius vigorously denied this will happen and said that HHS is “on track to fully implement marketplaces in January 2014, and to be open for open enrollment [in October].”
President Obama himself addressed the concern at an April 30 news conference.
“I think that any time you’re implementing something big, there [are] going to be people who are nervous and anxious about [whether] ‘is it going to get done?’ until it’s actually done,” he said.
Obama also pointed to the many hurdles confronting the effort, including having half of Congress determined to block and not adequately fund implementation, as well as having Republican governors who know it’s bad politics for them to implement the law effectively and GOP-dominated statehouses that won’t pass enabling legislation.
Still, Obama acknowledged that even if implementation goes perfectly, there still will be glitches and bumps. “And there’ll be stories that can be written that say, ‘Oh, look, this thing’s — you know — not working the way it’s supposed to, and this happened and that happened.’ And that’s pretty much true of every government program that’s ever been set up.”
He also pointed out that the exchanges will affect only about 10% to 15% of Americans directly, and that major elements of the ACA already have been implemented.
Gary Cohen, director of HHS’s Center for Consumer Information and Insurance Oversight (CCIIO), defended HHS’s implementation efforts during a contentious April 24 hearing of the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.
Rep. Fred Upton (R-Mich.) expressed doubts that the exchanges would be fully operational by Jan. 1, 2014. “We are just eight months from the full implementation, and by all accounts the Obama administration does not have its act together,” he said in his opening statement.
Subcommittee Vice Chairman Michael Burgess, M.D. (R-Texas), drew parallels to the implementation of the Medicare Part D prescription drug program, which got off to a bumpy start in 2006. “The six weeks of turmoil with Part D could likely turn into many more weeks or months, or even years of turmoil, when this program unfolds next year,” he said.
Other GOP members noted that some elements of the ACA have already been delayed, including in many states the multiple insurance options that were to be available on the Small Business Health Options Program (SHOP) exchanges. (In an unrelated delay, on April 30, HHS extended a deadline by three days, until May 3, for insurers to submit applications to participate in the federally run exchanges.)
The common GOP theme was significant doubt that the exchanges could open on time.
But Cohen remained firm in his assertion that the federal and state governments are on track. “I’m very encouraged by the progress the state marketplaces have been making,” he said. “We’re working with them on literally a daily and weekly basis. We’re in close contact with the people at the exchanges and in the state Medicaid agencies.”
Recent progress has been made on the all-important IT systems to support the exchanges, he said as an example. CMS has completed the technical design and protocols for connectivity of the Data Services Hub, Cohen said. The system will verify consumer information through one connection to each agency involved in the exchanges, including the IRS, Social Security Administration and Department of Homeland Security. CMS now is testing the hub with federal and state partners, he told the lawmakers.
“We are on schedule and track [with] the IT builds that we are doing, which is an important part of this,” he said. “I’m very optimistic and confident of where we are at this point.”
House Republicans also tried to pin down Cohen on whether health care costs would increase in the marketplaces. Rep. Bill Johnson (R-Ohio) said that President Obama promised that “supporters would see lower costs.”
Cohen responded that he would have to wait and see how the rates come in for 2014.
“Over time, people absolutely will see lower costs as we see more competition in the system [and] a broader risk pool. And if you look at tax credits and cost sharing, they will see lower costs,” he said. When pressed on whether the actual dollar amounts of premiums are likely to fall, Cohen said, “I expect that premiums will go down relative to what they would without the Affordable Care Act.”
For a transcript of President Obama’s April 30 news conference, visit http://tinyurl.com/c9o2fp8.
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