Senate HELP Committee Examines Upcoming Market Changes Under ACA

It was a strange feeling testifying before the Senate Health, Education, Labor and Pensions (HELP) Committee., given that, about 15 years ago, I was sitting on the other side of the dais as a staff member of the Committee. Today, my role was dramatically different, as I was called to speak as a witness at a hearing titled, “A New, Open Marketplace: The Effect of Guaranteed Issue and New Rating Rules.” In addition to examining the Administration’s work to implement the law via the testimony of Gary Cohen, Director of HHS’ Center for Consumer Information and Insurance Oversight, the Senators heard aboutactuarial studies suggesting that premium rates will rise because of the ACA’s market reforms.

In my testimony, I reviewed the status of the individual health insurance market today, and compared it to what the marketplace will look like once all of the ACA’s reforms are implemented. Other witnesses included Stacy Cook, a woman from Iowa who had been denied health insurance because of her battle with breast cancer and is facing bankruptcy because of her overwhelming medical bills, and Kevin Counihan, CEO of AccessHealth CT, Connecticut’s health insurance exchange.

Unlike some Congressional hearings, this one included minimal politics or podium-pounding. Many Senators had questions about ACA implementation issues relevant to their home state, and others had general questions about how all the various pieces and parts of the ACA will actually work for people. For example, Ranking Member Lamar Alexander’s (R-TN) first question of Gary Cohen addressed his concerns about individuals who will “churn” between Medicaid and commercial health insurance as their income fluctuates. Senator Al Franken (D-MN) asked about winding down state-based high risk pools and integrating their enrollees into the exchange. Senator Pat Roberts (R-KS) was concerned that the draft 21-page “streamlined application” would be a deterrent to consumers seeking to enroll.

The most debated topic was, no surprise, whether or not the ACA will result in increased premiums for people. Generally, the Committee’s minority members expressed the strongest concerns about “rate shock,” while the majority noted that the ACA has actually resulted in more modest premium growth over the last couple of years than in the years prior to passage. They also observed that some of the actuarial studies being cited don’t really assess the premium impact for comparable plans. Rather, they compare premiums for people currently enrolled in individual coverage with the premiums in the new plans coming on line in 2014 (for a deeper dive on comparing these recent reports, check out CHIR’s reviewhere, and a great analysis by Sarah Lueck at the Center on Budget and Policy Priorities, here). They also noted that the benefits in the new plans are so dramatically different from the current individual market policies (which provide “Swiss cheese” coverage, to use Chairman Tom Harkin’s (D-IA) term), that comparing premiums today to premiums in 2014 is not an apples-to-apples comparison. And, as Chairman Harkin pointed out, one study on behalf of the Society of Actuaries doesn’t take into account the amount that people have to pay out-of-pocket for health care, either because they’ve been denied due to a pre-existing condition, or because their policy doesn’t provide adequate coverage.

In my remarks, I noted that whenever a society moves from a system of “haves” and “have-nots” to a more equitable system, there are always disruptions. And yes, some people will pay more, but most will pay less, thanks in significant part to the premium tax credits available to low- and moderate-income individuals. And, while today there are insurance policies that seem inexpensive on the surface (assuming you can pass underwriting and actually purchase a policy), they don’t actually provide meaningful coverage, and they expose people to significant financial harm when they actually need to use health care services.

Chairman Harkin indicated that the HELP Committee will continue to examine implementation of the ACA in future forums. Stay tuned to CHIRblog for updates!