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Examining affordability of health care via more accessible new exchanges

October 2, 2013 at 12:00 AM EDT
In its opening days, the new online insurance exchanges have experienced a rush of interest and some technical difficulties along the way. Despite the glitches, will consumers find affordable plans? Gwen Ifill gets views from Sabrina Corlette of Georgetown University and Joe Antos of the American Enterprise Institute.

GWEN IFILL: As the new health care exchanges began their second day in operation, interest remained high and the problems remained, too. Officials say there were 4.7 million unique visitors to the federal Web site in the first 24 hours.

But there were still often long waits for those trying to get information or to enroll. The opening rollout has generated talk from both sides about what that suggests about the scope and ambition of the law.

We break some of that down now ourselves with Sabrina Corlette, who is with the Center on Health Insurance Reforms at Georgetown University. And Joe Antos is with the American Enterprise Institute.

I will start by asking both of you. As you watched yesterday’s launch, Joe Antos, what did you make of it?

JOE ANTOS, American Enterprise Institute: Well, I know a lot of people are very interested in the exchanges. You saw millions of people trying to get on you. You saw plenty of problems. Some of those problems are, frankly, routine, the sorts of things that we all live with in our daily life, things that will eventually be fixed. Hire a new programmer.

GWEN IFILL: Error messages, basically.

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JOE ANTOS: Yes, error messages, that sort of thing.

You know, the crowding the first day, I think a lot of those people weren’t actually looking for insurance. They wanted to see, what was this thing anyway? They wanted to see how that worked. But there are some other issues that are going to emerge that I think are beginning to emerge that are more fundamental that are much harder to solve.

GWEN IFILL: Well, let’s get to those in a minute, but, first, let me ask Sabrina Corlette.

Was this a bigger set of glitches yesterday than we saw, say, with Medicare Part D, the prescription drug benefit, when that rolled out?

SABRINA CORLETTE, Georgetown University: Well, you’re right. We did see a lot of glitches early on with Medicare Part D.

And I think what we saw back then is likely to be what we’re going to see today, which is the administration back then, which was at that time the Bush administration, it was a big domestic policy priority for them. And they had a rapid response team that when they found problems they reacted quickly, they built up more capacity, they added staff to the call center, they made sure that those glitches were fixed.

And I think that’s the same exact thing that we’re seeing. Even just today, HHS announced that they have added more capacity to the Web site.

GWEN IFILL: Well, let’s talk a little bit about some of the things we discovered after getting — for those who were able to get on to the site and were able to see price tags, for instance, attached to what they were being asked to sign up for, is — is — has this plan this that’s being rolled — has been rolled out, does it really make health care more affordable for most people?

JOE ANTOS: Well, it makes it more accessible for a lot of people.

The rules related to preexisting conditions, if you have an existing condition that requires medical treatments, now you can’t be refused and the coverage will also cover those treatments. So in that sense, it’s a little bit easier.

But I think the question really is — and we don’t have the answer to this — is it — is the price what people expect to pay? There was an awful lot of talk about how it was going to be almost free, and, of course, it’s not going to be almost free. But certainly for those people who most need insurance, this is a real benefit.

The question is, what about the people who don’t feel they need insurance? Will they buy it? Will the young people buy this coverage?

GWEN IFILL: Well, that’s an interesting point because a lot of the push and a lot of the P.R. has been around getting young people, relatively healthy young people to sign up and therefore carry the weight for those who are older and more ill. Is that — has that balanced been worked out yet, Sabrina Corlette?

SABRINA CORLETTE: Well, no one has a crystal ball, and so we don’t know exactly who will enroll in these exchanges and whether they will be older or younger.


Certainly, for people who are trying to buy health insurance on the marketplace today or before these reforms go into effect, they’re going to get a better deal, a better value on these exchanges than they can possibly get in the individual market today. And that’s because they will be able to access subsidies and they will be able to access comprehensive coverage that covers things like maternity care, prescription drugs, mental health, hospitalizations, things that you can’t know with confidence are covered in the individual market today.

GWEN IFILL: You don’t agree with that?

JOE ANTOS: Well, here’s the problem.

Remember that it isn’t just the premium and the premium subsidy. It’s also the deductible and the co-payments that you have to make. And in particular, my favorite example, 28-year-old guy, perfectly healthy, or at least so he thinks, not that interested in health insurance. And if he’s looking at something with, you know, tremendous subsidies, he’s only paying $100 a month, but the deductible is $5,000, he’s not going to break the $5,000.

He’s not going to get anything for it. And when he thinks about it, he’s going to think twice about whether having a little bit of extra mental security is worth $1,200 a year to him.

GWEN IFILL: Isn’t that the decision people make every day now, the tradeoff?

JOE ANTOS: Well, right. And now they’re going to be faced with the option to actually make that tradeoff.

But, certainly, the mandates, that doesn’t have any teeth in it. So there’s no really effective penalty for not buying insurance. And knowing that you can buy insurance next year in the next open enrollment period means that you’re basically only making a bet this time only for nine months.

GWEN IFILL: Is the mandate not tough enough, Sabrina?

SABRINA CORLETTE: Well, I’ll tell you, the Congressional Budget Office says that if the mandate isn’t put into place this year, there will be 11 fewer people — 11 million fewer people getting health insurance coverage without the mandate.

And so certainly most analysts who look at this question say that the mandate does have an impact. And it’s a critically important piece of the law, and it’s sort of a — like a three-legged stool, and if you knock the mandate out, the law will fall of its own weight.

GWEN IFILL: Well, let me ask about another tradeoff. If you’re a small business person and you have provided by insurance for your employees, what is — is there a disincentive now to continue to do that if they can get it on their own on this exchange?

JOE ANTOS: For a small business, it may not even have made sense to have offered coverage. There just wasn’t another alternative. So, in fact, I think we will see small businesses drop their coverage because their employees will probably be able to get a better deal than they could get. I mean, if you’re a small business, you’re being charged a pretty high premium.

GWEN IFILL: What’s to stop that from creeping up to larger businesses, if that were to happen?

SABRINA CORLETTE: Well, look, health insurance has been a voluntary benefit employers have provided to their employees for generations because they want to attract and retain a healthy work force. That dynamic doesn’t change because of the Affordable Care Act.

But employers have been struggling for years against rising health care costs. And one thing that has been true since the ACA was passed is that those cost increases year to year have improved and have sort of started to flatten out because of some of the cost-containment measures that were in the bill.

GWEN IFILL: We only have a short period of time left, so I want you to both give me a sense of when will you begin to measure, to gauge accurately whether this rollout is a success or not? How much time would you give it?

JOE ANTOS: I think we’re not really going to know until February or March, partly because it’s hard to get the data, but partly because it’s not just people signing up. It’s also, will people continue to pay the premiums once they experience the coverage?

That doesn’t start until January. And if they don’t like the coverage, they’re going to stop and they’re going to drop out.

GWEN IFILL: What do you think about that?

SABRINA CORLETTE: I’m taking the long view as well.

I think we really don’t start to measure success until people start to access their benefits, seek health care, and then get the financial protection that insurance is supposed to provide.

GWEN IFILL: Sabrina Corlette and Joe Antos, thank you both very much.