As President Obama reluctantly granted Americans thrown off their health plans quasi-permission to possibly keep them, he called them "the folks who, over time, I think, are going to find that the marketplaces are better." He means the ObamaCare exchanges that are replacing the private insurance market, adding that "it's important that we don't pretend that somehow that's a place worth going back to."
Easy for him to say. The reason this furor will continue even if the website is fixed is that the public is learning that ObamaCare's insurance costs more in return for worse coverage.
Mr. Obama and his liberal allies call the old plans "substandard," but he doesn't mean from the perspective of the consumers who bought them. He means people were free to choose insurance that wasn't designed to serve his social equity and income redistribution goals. In his view, many people must pay first-class fares for coach seats so others can pay less and receive extra benefits.
Liberals justify these coercive cross-subsidies as necessary to finance coverage for the uninsured and those with pre-existing conditions. But government usually helps the less fortunate honestly by raising taxes to fund programs. In summer 2009, Senate Democrats put out such a bill, and the $1.6 trillion sticker shock led them to hide the transfers by forcing people to buy overpriced products.
This political mugging is especially unfair to the people whose plans on the current individual market are being taken away. The majority of these consumers are self-employed or small-business owners. They're middle class, rarely affluent. They took responsibility for their care without government aid, and unlike people in the job-based system, they paid with after-tax dollars.
Now they're being punished for the crime of not subsidizing ObamaCare, even though the individual market was never as dysfunctional or high cost as liberals claim. In 2012, average U.S. individual premiums were $190, ranging from a low of $123 in North Dakota to a high of $385 in Massachusetts. Average premiums for family plans fell that year by 0.5% to $412.
Those numbers come from the 13,000 different policies from 180 insurers sold on eHealthInsurance.com, the online shopping brokerage that works. (Technological wonders never cease.) Individuals can make the trade-offs between costs and benefits for themselves. This wide variety is proof that humans don't all want or need the same thing. If they did, there would be no need for a market and government could satisfy everybody.
The U.S. Supreme Court has agreed to referee another dispute over President Barack Obama's healthcare law, whether businesses can use religious objections to escape a requirement to cover birth control for employees.
The justices said Tuesday they will take up an issue that has divided the lower courts in the face of roughly 40 lawsuits from for-profit companies asking to be spared from having to cover some or all forms of contraception.
The court will consider two cases. One involves Hobby Lobby, an Oklahoma City-based arts and crafts chain with 13,000 full-time employees. Hobby Lobby won in the lower courts.
The other case is an appeal from Conestoga Wood Specialties Corp., a Pennsylvania company that employs 950 people in making wood cabinets. Lower courts rejected the company's claims.
The court said the cases will be combined for arguments, probably in late March. A decision should come by late June.
The cases center on a provision of the healthcare law that requires most employers that offer health insurance to their workers to provide a range of preventive health benefits, including contraception.
In both instances, the Christian families that own the companies say that insuring some forms of contraception violates their religious beliefs.
The key issue is whether profit-making corporations can assert religious beliefs under the 1993 Religious Freedom Restoration Act or the First Amendment provision guaranteeing Americans the right to believe and worship as they choose. Nearly four years ago, the justices expanded the concept of corporate "personhood," saying in the Citizens United case that corporations have the right to participate in the political process the same way that individuals do.
To ease insurance sign-ups that have been slowed by federal website problems, CMS officials have announced that individuals and families now can enroll for exchange health plans directly through insurers and still qualify for a federal premium subsidy.
Previously, HHS directed everyone seeking exchange plan coverage and a federal premium subsidy—available to individuals and families earning up to 400% of the federal poverty level—to enroll through a state- or federally operated marketplace.
In actuality, HHS finalized rules on direct enrollment by insurers in August. As Tim Jost, a Washington and Lee University law professor and healthcare reform expert describes the process in a Health Affairs blog, the applicant must start at the insurer's website and provide basic information, then transfer to the exchange website where eligibility for premium tax credits is determined. Then the applicant returns to the insurer's website for plan selection.
HHS has announced it will permit direct enrollment in the 36 states served by the federal exchange. But it's up to each state-run exchanges to decide for itself whether to allow it, Jost said. Consumers also can sign up for exchange health plans through insurance agents and brokers who have received exchange training and certification.
Given the ongoing difficulties of the federal website, direct enrollment through insurers could prove to be an important alternative method for allowing large numbers of individuals to sign up for coverage. But it remains to be seen how well federal officials and insurers can make this work.
Some consumer advocates fret that having people sign up directly through insurers undermines one of the advantages of the online marketplaces, since consumers will only see the plan options offered by that particular insurer and won't be able to comparison shop for the plan that best meets their needs in terms of benefits, premium, cost-sharing and provider network.
But the HHS final rule does require insurers to inform all direct-enrollment applicants that other qualified plans are offered by other insurers through the exchange, and to give them an opportunity to view the premiums, benefits and other features of those other plans.
Jost wrote that direct enrollment will facilitate getting as many people enrolled in coverage as quickly as possible. While the direct enrollment portal hasn't been working well up to this point, HHS said it has fixed some of the problems, and insurers are checking to see if they can make it work.
The chaotic rollout of the federal online marketplace, HealthCare.gov, and the low enrollment through the site has been the dominant storyline since it opened for business on Oct. 1. Fewer than 27,000 people in the 36 states served by the federal portal successfully enrolled during the first month of business.
But state-run exchanges operated in 14 states and the District of Columbia generally fared better in getting up and running. About three quarters of enrollees nationwide as of Nov. 2—nearly 80,000—signed up for private plan coverage through those 15 exchanges. That significantly boosted the first month's nationwide enrollment, though the 106,000 figure still amounted to only about one-fifth of what the Obama administration originally projected for October.
On Thursday, Families USA, a group focused on expanding insurance coverage, hosted a call with reporters to emphasize some of these state successes. In New York, for example, as of Nov. 12, nearly 50,000 people had signed up for coverage. Those enrollments were split almost evenly between individuals who qualified for Medicaid plans and those who signed up for a private health plan offered on New York State of Health.
n Connecticut, roughly 14,000 individuals have signed up for coverage through the state's online marketplace. Kevin Counihan, CEO of Access Health CT, said that's roughly double what was anticipated. Those expectations were influenced by Counihan's experience serving as chief marketing officer for Massachusetts' Connector exchange when it launched in 2007. Only 123 individuals enrolled for coverage in the first month that the Massachusetts marketplace was open for business in 2007.
But even in states where the exchanges are functioning relatively well, there is some residual fallout from the problems associated with the federal website. Covered California enrolled roughly 60,000 individuals for coverage in its first six weeks of operations. But Peter Lee, the exchange's executive director, said his marketplace has had to tweak its marketing material to emphasize that the California website is working, because residents aren't necessarily aware that it's separate from the federal marketplace.
The deal is meant to mollify millions of people enraged after their insurers canceled policies that do not meet Obamacare requirements. The uproar has ensnared the White House for weeks, shining a spotlight on Obama's previous promise that people who liked their insurance plans can keep them.
"This fix won't solve every problem for every person" but it will help many, the President said at the White House. "We are going to do everything we can to help Americans who've received these cancellation notices."
But the fix, as reported earlier by CNN's Dana Bash, puts the onus of the renewals on insurers. The administration is not requiring insurers or state insurance commissioners to extend the existing plans, but instead is allowing insurers to offer an additional year of coverage.
Also, insurers must notify policyholders of the difference in benefits between their policies and the Obamacare plans available on the insurance exchanges. And the companies must inform people that additional policies are available on the exchanges and that subsidies may be available to those who qualify.
The launch of the Affordable Care Act has so far been marred by major technological problems with both the federal and state enrollment websites.
Obama admitted the problems in his comments. "We fumbled the roll out on this health care law," he said.
The administration reported Wednesday that fewer than 27,000 Americans selected an insurance plan through the federal healthcare.gov site, which is handling enrollment for 36 states. And the site is still far from fully operational, leaving tech experts racing to get it working by month's end, as the administration promised.
State regulators concerned about impacts
Not long after Obama's speech Thursday, an association of state insurance regulators said it was concerned that the decision could drive premiums higher.
The National Association of Insurance Commissioners, which represents Connecticut Commissioner Thomas Leonardi and 49 others, said the decision would be a detriment to the insurance marketplace.
"This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond," the NAIC said in a statement.
The group also noted that it remains unclear how the reversal can be practicably implemented, now that cancellation notices have gone out to many and rates have been approved for 2014.
Leonardi released this statement: "The department is carefully examining the full effect that this change would have on all Connecticut policyholders. The ACA is an expansive and complex law built on myriad consumer protections and any change deserves careful and thoughtful analysis."
The insurance industry said it had similar concerns to the commissioner's group.
"If due to these changes fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers," Karen Ignagni, president of industry group America's Health Insurance Plans, said in a statement. "Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers."
Hartford-based Aetna — one of the nation's largest health insurers — told Reuters Thursday that it will need cooperation from state regulators across the country on policies and rates to bring cancelled plans back into existence.
"We support efforts to allow people to keep what they have. However, we will need cooperation and expedited approval from state regulators to remove barriers that would make it difficult to make this change in such a short period of time," Aetna told Reuters.
Seeking to defuse a growing political furor as millions of Americans receive cancellation notices from health insurers, the Obama administration will not require insurance companies to upgrade existing individual plans to meet the requirements of the healthcare reform law this year.
White House officials say it can be done without legislation. President Barack Obama was scheduled to speak about the issue from the White House late Thursday morning.
The announcement comes a day after the administration reported that just 106,000 Americans enrolled in private plans through the law's health insurance exchanges through Nov. 2. A number of Democrats have signaled they would support legislation to address the cancellations and the troubled rollout of the exchanges.
“Essentially this is an extension of the grandfathering principal,” said a senior White House official, speaking to reporters on background.
Insurers that choose to take advantage of the change will have to follow two rules. They'll have to notify consumers what protections required under the Affordable Care Act these renewed plans do not include. They'll also be required to tell consumers that they'll have additional options avail
Nearly six weeks into the open enrollment period, the federal government is poised to report for the first time how many Americans have signed up in the 36 states where HHS is operating the marketplace. That number will be between just 40,000 and 50,000, according to a report in the Wall Street Journal.
But in states that opted to build their own insurance exchanges, preliminary data has already provided a sketch of the progress: It's slow.
In the wake of intense criticism, President Barack Obama apologized to Americans who are losing health insurance plans he repeatedly said they could keep and pledged to find fixes that might allow people to keep their coverage.
"I am sorry that they are finding themselves in this situation based on assurances they got from me," the President said in an interview Thursday with NBC News.
He elaborated: "We've got to work hard to make sure that they know we hear them, and we are going to do everything we can to deal with folks who find themselves in a tough position as a consequence of this.
Officials said the president was referring to fixes his administration could make on its own, not legislative options proposed by congressional lawmakers.
The president's apology comes as the White House tries to combat a cascade of troubles surrounding the rollout of the healthcare law, often referred to as "Obamacare."
The HealthCare.gov website that was supposed to be an easy portal for Americans to purchase insurance has been hobbled by technical issues. And with at least 3.5 million Americans receiving cancellation notices from their insurance companies, there's new scrutiny aimed at the way the president tried to sell the law to the public in the first place.
Obama stopped short in Thursday's interview of apologizing for telling Americans they would be able to keep their insurance plans if they liked them — a promise he has made repeatedly since the law was enacted. But he did take broader responsibility for the health care woes than in his previous comments about the flawed rollout, declaring that if the law isn't working, "it's my job to get it fixed."
"When you've got a health care rollout that is as important to the country and to me as this is and it doesn't work like a charm, that's my fault," he said.
Some Republicans, who remain fierce opponents of the law three years after it won congressional approval, appeared unmoved by Obama's mea culpa.
In recent days, focus has intensified on the president's promise that Americans who liked their insurance coverage would be able to keep it. He repeated the line often, both as the bill was being debated in Congress and after it was signed into law.
But the health care law itself made that promise almost impossible to keep. It mandated that insurance coverage must meet certain standards and that policies falling short of those standards would no longer be valid except through a grandfathering process, meaning some policies were always expected to disappear.
The White House says under those guidelines, fewer than 5 percent of Americans will have to change their coverage. But in a nation of more than 300 million people, 5 percent is about 15 million people.
Officials argue that those forced to change plans will end up with better coverage and that subsidies offered by the government will help offset any increased costs.
On Wednesday, Obama met at the White House with Senate Democrats facing re-election next year to try to ease their concerns about the impact the rough health care rollout might have on their races. Many senators in the meeting asked for the enrollment period to be extended beyond the March 31 end point, but the White House said it doesn't think that will be necessary.
Obama administration officials reported progress Monday in fixing problems with electronic submissions between the federal HealthCare.gov insurance marketplace and insurance companies. They also claimed consumers' ability to complete enrollment applications has improved.
The transmissions, known as the Accredited Standards Committee X12 834 standard, or 834s for short, tell insurers which people chose their plans and whether they are eligible for federal premium subsidies under the Patient Protection and Affordable Care Act. They contain sensitive personal information like Social Security numbers.
Insurers had noted errors in the information they were receiving. After “significant fixes” over the weekend, insurers should now see the appropriate date and time a person signed up for coverage, the correct code for the health plan the consumer applied for, and the consumer's contact information, said Julie Bataille, the CMS communications director.
She also said software bugs affecting a person's ability to save and continue paused applications also have been repaired.
Bataille said there was still some information in the forms that is coming to payers incorrectly, but she did not provide details. She insisted that fixing 834 errors would continue to be a top priority and that the CMS is working with insurers to resolve the kinks.
Insurers participating in the federal exchange are taking a wait-and-see attitude toward CMS' fixes. A spokeswoman for the Health Care Service Corp., a Blue Cross and Blue Shield company serving several states, said it was too soon to comment on any improvements.
Another senior insurance source who did not want to be identified noted that while the CMS has “said they have made those fixes, I don't think plans have gotten the files yet to know how well they are now working.” The source added that complete forms are sent to insurance companies at 6 p.m. each day.
With bipartisan pressure mounting to delay the healthcare reform law's individual mandate, the fate of President Barack Obama's landmark achievement may rest on how quickly his administration can get the online enrollment process working effectively. But most political observers don't expect any delay at this time in the requirement that nearly all Americans sign up for insurance coverage by March 31.
The success of the law's insurance reforms depends largely on getting a large number of Americans, including lots of healthy people, to sign up for coverage through the federal and state-run exchanges. The administration recently launched a “tech surge,” bringing in a website management czar and IT experts to fix the massive enrollment problems.
But up to now, enrollment—particularly on the federal HealthCare.gov exchange website serving 36 states—has been slow and consumers have faced problems getting needed information. That has prompted many Republicans and some Democrats to call for pushing back the enrollment deadline so people experiencing technological problems in signing up aren't hit with the law's tax penalty for not getting coverage.
In addition, there is growing political pressure to at least temporarily allow Americans with individual-market coverage to keep policies that are being canceled by insurers because they don't meet the cost-sharing and benefit requirements of the Patient Protection and Affordable Care Act. Sen. Mary Landrieu (D-La.) last week said she would propose a bill to ensure everyone could keep their existing coverage.
Political momentum for a mandate delay continued to build last week, especially among Democrats facing re-election next year. Nine House Democrats co-sponsored a bill that would give consumers 90 days to enroll after HHS' Office of the Inspector General certified that HealthCare.gov is completely operational, then delay the mandate penalty for another 30 days after that. On the Republican side, Sen. Marco Rubio of Florida introduced legislation to postpone the individual mandate until six months after the Government Accountability Office deems that HealthCare.gov is fully functional. The week before, 10 Senate Democrats wrote to Obama urging him to extend open enrollment for an indefinite period.
Meanwhile, analysts worry about the ripple effects that a delay would have on the law's health insurance exchanges. Edwin Park, vice president for health policy at the left-of-center Center on Budget and Policy Priorities, pointed to a Congressional Budget Office analysis of the House-passed bill to delay the individual mandate that estimated a yearlong delay would increase the number of uninsured Americans by 11 million in 2014.
At last week's House Ways and Means Committee hearing on the botched rollout of the federal website, panel Chairman Dave Camp (R-Mich.) said it appears unlikely that the exchange plans will enroll enough young and healthy adults in the first year—about 2.3 million by the CMS' estimate—which will cause premiums to “go through the roof” in 2015.
Both Tavenner and HHS Secretary Kathleen Sebelius—who testified last week before the House Energy and Commerce Committee—faced aggressive questioning from lawmakers about problems with the federal website; decisions that HHS and the CMS made before the Oct. 1 launch of open enrollment; privacy and security protections for consumers; the accountability of federal contractors working on the federal exchange; and Obama's earlier promise that those Americans who like their health insurance plans can keep them. They offered apologies for what Sebelius called the HealthCare.gov “debacle,” and promised that the federal website will operate smoothly and effectively for most consumers by late November.
Lawmakers also pressed both officials to provide details on the number of enrollees so far, which administration officials have said repeatedly they will release in mid-November.
Meanwhile, administration officials have said they expect early enrollment to be low. In a speech in Boston last week, Obama reminded Americans that the start of Massachusetts' ultimately successful healthcare reform seven years ago was similarly slow. He said the nation will overcome the early challenges.
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