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Congress grills Medicare head as some insurance holders get cancellation notices

October 29, 2013 at 12:00 AM EDT
Medicare chief Marilyn Tavenner faced questions on Capitol Hill about the rocky rollout of HealthCare.gov and the administration's proposed timeline for fixes. Kwame Holman reports. Jonathan Gruber of MIT and industry consultant Robert Laszewski join Gwen Ifill for more on Americans whose insurance policies are being canceled.
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JUDY WOODRUFF: Members of Congress took fresh aim at the new health care law today. The House Ways and Means Committee called in the head of the Centers for Medicare and Medicaid Services, who accepted responsibility for some of the problems with the health care website.

NewsHour congressional correspondent Kwame Holman begins our coverage.

MARILYN TAVENNER, Centers for Medicare and Medicaid Services: To the millions of Americans who have attempted to use healthcare.gov to shop and enroll in health care coverage, I want to apologize to you that the website has not worked as well as it should.

KWAME HOLMAN: At the outset, health program administrator Marilyn Tavenner acknowledged the myriad problems with the federal exchange website that launched Oct. 1.

But she ran into Republican skeptics over the administration’s new timeline to fix the computer access roadblocks by the end of November.

REP. KEVIN BRADY, R-Tex.: You had nearly four years to get it ready. Now you’re saying, in four weeks more, it will be great. So what’s different? Why should anyone believe these claims?

MARILYN TAVENNER: Because I think we have identified two major problems. One had to do with the initial volume. And despite our best volume projections, we underestimated the volume, the interest in the site. The second thing is, we have found some what I will call functional or glitches, as we call them in the public term, in the actual application itself, which we’re repairing.

KWAME HOLMAN: Outside contractors have said Tavenner’s agency curtailed testing of a site meant to enroll millions of uninsured Americans in 36 states.

REP. DAVE CAMP, R-Mich.: Do you have an idea of how many applicants became enrollees?

KWAME HOLMAN: Today, Tavenner said 700,000 have applied. She declined to say how many actually have enrolled.

MARILYN TAVENNER: We will not have that until mid-November. We have people who are shopping now. We expect the initial number to be small, and I think you have seen this in our projections.

KWAME HOLMAN: Committee Republicans also challenged Tavenner on other aspects of the Affordable Care Act, beyond the technical problems of the healthcare.gov website, among them, whether President Obama has broken his promise that Americans would be able to keep their existing health plans if they wanted them.

Ways and Means Committee Chairman Dave Camp bore in on that point.

DAVE CAMP: This man wrote me and said: “My wife has been recently informed by her insurance carrier that her health care policy doesn’t comply with the Affordable Care Act. Now we must purchase a new policy to get the same coverage at an 18 percent increase in our premium.”

So what happened to the “if you like your insurance, you can keep it” question?

MARILYN TAVENNER: Now if, in fact, the issuer has decided to change the plan, didn’t have to, but plans were grandfathered in, in 2010, and if they offer new plans, they have to come in to the requirements of the Affordable Care Act.

So what I would tell that individual is if their carrier is telling them they’re changing the plan and they’re offering an increase, that they would need to go take a look at what’s available in their state and in their market, which is certainly something that’s available to them through the exchange.

KWAME HOLMAN: Democrats have joined in criticizing the health plan cancellations and online malfunctions. But they also voiced frustration with Republicans today, as in this exchange.

REP. BILL PASCRELL JR., D-N.J.: Let’s not water wine here. Let’s say it like it is. You refused to expand, many of these governors, Medicaid. They refused to set up state marketplaces through — and leaving millions of dollars in outreach on the table in education funding.

What are you going to do about the approximately 17 million children with preexisting conditions who can no longer be denied health insurance coverage?

REP. TIM GRIFFIN, R-Ark.: It’s a false choice to say it’s Obamacare or nothing. There are numerous proposals, including the one that I’m a co-sponsor of.

BILL PASCRELL JR.: Are you serious, what you just said? Are you really serious?

 

We have gone through 44 votes — 48 votes now — of you trying to dismantle this legislation. You call that cooperation? I don’t.

 

KWAME HOLMAN: Next up, Tavenner’s boss, Health and Human Services Secretary Kathleen Sebelius. She appears tomorrow before the House Energy and Commerce Committee.

 

GWEN IFILL: As Kwame just reported, hundreds of thousands of Americans have been surprised in recent weeks with cancellation notices from their health insurance companies. Many of them are unhappy at being forced back into the health care marketplace even as the federal government struggles to get the Affordable Care Act up and running.

Why the change? And does it constitute a broken presidential promise?

For that, we turn to Jonathan Gruber, a health economist at MIT who’s considered one of the many architects of the Affordable Care Act, and Robert Laszewski, a consultant to the health insurance industry.

Welcome to you, gentlemen.

OK, I have to start with you, Jonathan Gruber, since you are one of the architects of the Affordable Care Act. Did the president make a promise that he couldn’t keep?

JONATHAN GRUBER, Massachusetts Institute of Technology: You know, I don’t want to get into the president’s word choice.

What the president said is people can keep the insurance they like. He probably should have said people can keep the quality insurance that they like. There’s a lot of insurance out there that isn’t really quality insurance that has various limitations with it.

But the key thing to remember is that this is not an issue for the vast majority of Americans. The vast majority of Americans have health insurance from their employer or from the government, and that’s not touched. This is an issue for the substantial minority, maybe 5 percent or 6 percent of Americans, that buy insurance on their own.

About half of that population will probably have to buy up because of this law. Their policies are getting changed. Others, their policies are getting canceled, but they can buy things that are substantively similar.

GWEN IFILL: Robert Laszewski, what do you think about that? Was this at the very least an oversimplification?

ROBERT LASZEWSKI, health insurance consultant: Well, you’re looking at one of the people who the promise wasn’t kept for. I have an individual health insurance policy.

I received my cancellation letter a few weeks ago. It wasn’t a junk policy. I think one of the things I hear that Obama administration say, we have got all these substandard policies. That just isn’t the case. I had a gold-plated health insurance plan. I could go to any doctor or hospital in the United States, virtually. I could go to the Mayo Clinic. I could go to the Cleveland clinic.

I have been in the health insurance business for 40 years. I had a gold-plated Cadillac plan. My health insurance company sent me — the Blue Cross plan sent me a cancellation notice, told me I could go look at other plans for January. The best plan I can find personally is another Blue Cross plan. I’m happy to stay in that network. But it’s got a much narrower network, hundreds of thousands of providers less. The deductible is $500 higher.

And the rate increase is 66 percent more.

GWEN IFILL: But isn’t there a distinction…

ROBERT LASZEWSKI: I spoke with a good friend in Fresno a few minutes ago who told me his granddaughter is getting a 43 percent increase, and she’s got a terrific plan.

GWEN IFILL: But let’s distinguish between…

(CROSSTALK)

ROBERT LASZEWSKI: So, this business that these are — this is a small percentage of people just isn’t the case.

GWEN IFILL: Well, let’s distinguish between anecdotes and what — and the larger question, I guess, Mr. Laszewski, which is, how much of this is when you’re talking about people like you in the individual market, as opposed to people who get their insurance, most people, from their employers or from Medicare and Medicaid?

ROBERT LASZEWSKI: According to the Association of Health Insurance plans, there are 19 million people in the individual health insurance market.

 

The vast majority of them are not going to be so-called grandfathered and be able to keep their plans. If you bought your plan since March of 2010, it is not grandfathered. You’re not going to be able to keep it. If you have a plan in force between March of 2010, the only way you can keep it is if you made almost no changes to it.

GWEN IFILL: Let me ask…

ROBERT LASZEWSKI: In the individual health insurance market, it’s very common for people to increase their deductibles in order to avoid rate increases.

My estimate is something like 80 percent of the people in the individual health insurance market between now and December 2014 will not be able to keep the plan they’re in.

GWEN IFILL: Well, you said a lot — you put a lot out there. Let me give Mr. Gruber a chance to respond to that.

JONATHAN GRUBER: Sure. And, look, this is a matter of degrees.

I absolutely — I absolutely agree with Mr. Laszewski that some people won’t be able to keep their plan. But let me point out a couple facts. First of all, the 19 million number is wrong. That includes many people for whom individual insurance is a supplement to their group insurance, not their primary insurance.

The number of Americans for whom individual insurance is their primary insurance is about 12 million, still a big number, but smaller, but, remember, Gwen, less than 10 percent of the share of people that get insurance from their employer. So we’re talking about a substantial minority of the population.

GWEN IFILL: And yet…

(CROSSTALK)

ROBERT LASZEWSKI: The president made a promise, and 12 million people are not — are going to have to change their health plan.

(CROSSTALK)

GWEN IFILL: Mr. Laszewski, let me just — yes, let me just finish this up, because I just want to point out that, in Pittsburgh, they sent out cancellation notices to 20 percent, Mr. Gruber. In Florida, Florida Blue Cross sent them out to 80 percent of their members, in Philadelphia to 45 percent.

That may be — it may seem small, but it sounds like big chunks of the individual market are being carved up here.

JONATHAN GRUBER: Absolutely, Gwen.

So, I just — the first thing I just want to point out, it’s the individual market. Second point, this is a market with huge turnover anyway. Only 17 percent of people in this market stay in this market for more than two years. This is a market that turns over a lot anyway.

Third, that’s absolutely right. There are some people — the president definitely generalized. There are some people who will not be able to keep their policies. But most people losing policies, most — not most people — about half of the people losing policies will be able to buy insurance that’s comparable to what they had. About half won’t.

GWEN IFILL: But what happens…

JONATHAN GRUBER: About half of these 12 million…

GWEN IFILL: But what happens if you lose your — if you lose — you get your a cancellation notice today, and you want to go online to get the new insurance, but you can’t because of the problems with the system, with the website, and you are not covered in January or whenever this kicks in?

JONATHAN GRUBER: Well, I completely agree that’s a problem if the website not working by the end of November.

You don’t have to sign up today to be covered by January. It’s nice to be able to shop today, but you need to be signed up by mid-December. So, if the website is not working by the end of January, then I think that is an issue.

(CROSSTALK)

ROBERT LASZEWSKI: This is a huge issue, and I would just…

(CROSSTALK)

GWEN IFILL: Mr. Laszewski, go ahead.

ROBERT LASZEWSKI: To just help your audience, any of the people who have gotten the cancellation letters, I have renewed my policy by calling my insurance company directly and doing it and going around the site.

Now, the bad news is, I really wasn’t able to shop because I went to one carrier. And the other thing is, if I need subsidies, I can’t get a subsidy from my carrier because they can’t get into the subsidy system either. But, as a fallback temporarily, I would encourage people to call their incumbent carrier and get the best situation they can, so they don’t have a lapse in coverage.

GWEN IFILL: That’s a temporary — that’s a temporary fix, Mr. Laszewski.

(CROSSTALK)

JONATHAN GRUBER: And I would actually…

GWEN IFILL: OK, go ahead, Mr. Gruber.

(CROSSTALK)

ROBERT LASZEWSKI: Yes. Yes. But that’s the only fix there is, Gwen. The — the — the government — healthcaregovernment.com doesn’t work.

GWEN IFILL: Mr. Gruber?

JONATHAN GRUBER: Well, but the point is, it doesn’t have to work yet.

I’m not saying it’s not a shame that it doesn’t work. It’s a problem. I wish it worked. But we’re panicking over a very short-run problem. It doesn’t have to work yet. It has to work by the end of November or mid-December, so people can sign up.

(CROSSTALK)

ROBERT LASZEWSKI: Oh, my goodness.

JONATHAN GRUBER: If it doesn’t…

ROBERT LASZEWSKI: Healthcare.gov has been three years in coming, and they have got fix it in five weeks. They have got to clean up a mess that took three years in five weeks. I — I don’t know that we panic, but there’s reason for great concern here.

GWEN IFILL: So, you don’t think there’s a fix, Mr. Laszewski.

What do you think Mr. Gruber?

JONATHAN GRUBER: I think that neither Mr. Laszewski nor I have any qualifications for talking about the ability to carry out the I.T. tasks involved over the next five weeks.

I just know what the government said. They have said they will have it up and running. And I’m saying, if they don’t, then the issues Mr. Laszewski raises are real ones, and the government has to figure out how to help those whose policies are canceled.

(CROSSTALK)

JONATHAN GRUBER: But let’s not panic yet. If it’s not ready in five weeks, then I think we do need to raise these issues.

GWEN IFILL: Jonathan Gruber of MIT and Bob Laszewski, a health industry consultant, thank you both very much.

JONATHAN GRUBER: My pleasure.

ROBERT LASZEWSKI: Thank you, Gwen.