How Changes To The Affordable Care Act Could Affect Consumers And Insurance Companies

MS. DIANE REHM

10:06:53
Thanks for joining us. I'm Diane Rehm. Last week, President Obama announced that individuals and small businesses could keep their cancelled insurance policies for one year, but just a handful of states say they'll allow the president's fix. Critics warn it will sabotage the exchanges by keeping healthy people out.

MS. DIANE REHM

10:07:18
Here to discuss changes in the ACA, what it means for consumers and the health insurance providers: Ron Pollack of Families USA, Julie Rovner of NPR, William Hoagland of the bipartisan policy center, and Joseph Antos of the American Enterprise institute. But first, before we begin our conversation here in the studio, joining us from Seattle, Wash. is Michael Kreidler. He's insurance commissioner for the state of Washington. Welcome to you, sir. And tell us why you decided not to allow the ACA fix.

MR. MICHAEL KREIDLER

10:08:03
Diane, it would've been very disruptive to the Washington insurance market, and no one doubts -- I'm a very big supporter of the Affordable Care Act. We're on schedule. I think what the president proposed may work for some states, particularly those with federally-facilitated exchanges and the delays because of the website and the like.

MR. MICHAEL KREIDLER

10:08:23
We don't have those kind of problems in the state of Washington. We're going to be able to implement the Affordable Care Act as President Obama wants on an earlier schedule, and it wouldn't be as disruptive to us if we tried to incorporate the change that he proposed, particularly for those states that may be more challenged.

REHM

10:08:43
Do you any idea of how many people in the state of Washington have had their insurance policies cancelled?

KREIDLER

10:08:53
There were approximately 290,000 people in the individual market in the state of Washington. All of them virtually would have wound up receiving discontinuation and replacement notices, which I'd like to point out are notices that have gone out over the years multiple times and have not been as controversial, obviously, as this one was just because of timing and association with the Affordable Care Act.

KREIDLER

10:09:20
When I say replacement, which is the notice that is sent out by the insurance companies, people always have the opportunity of taking the replacement product that is offered by their insurance company. If they take that, it might not be the best fit for them, but it's not as if there's going to be a gap in coverage for them.

REHM

10:09:39
But how will the loss of those 290,000 individuals have an impact on the integrity of your health insurance exchange?

KREIDLER

10:09:54
The problem would be that you create two different risk pools. You have one risk pool for the Affordable Care Act policies, which is what we were operating under as our assumption for the state of Washington, and you'd have another risk pool, which would have been made up of people who were, for one year, being allowed to continue their individual private policies.

KREIDLER

10:10:13
That would have been very difficult to accomplish, that those policies in the individual market that would be continued have never been rated and the risk that would be in the Affordable Care Act pool because it was being adulterated by changing the parameters of how they judge what they price their product to had never taken into account there being two risk pools. So it was one that, for us, would've been disruptive in the state of Washington since our health insurance exchange is working quite well.

REHM

10:10:52
OK. But what about the folks who've had their policies cancelled? Do you think they deserve any relief?

KREIDLER

10:11:01
I have a lot of empathy for those people, and naturally not everybody is going to walk away feeling like they were made better by virtue of the Affordable Care Act, particularly if they were younger and healthier and didn't have much in the way of medical claims. It's more than likely that they would wind up paying somewhat more, but they have so much in the way of choices right now, dozens of plans to choose from, many of which would be better than just accepting that the replacement product that's offered by their current insurer...

REHM

10:11:33
All right. And finally, I'm interested in your reaction to hearing about the District of Columbia's insurance commissioner who was apparently fired for making a decision similar to yours.

KREIDLER

10:11:50
I think the -- I don't know all of the circumstances. I've read The Washington Post account of that, and the Huffington Post also had a piece on it this morning. And I can only speculate that perhaps there was more of a generalization to the entire country. I'm only speaking to the state of Washington, what makes sense for Washington.

REHM

10:12:14
Michael Kreidler, he's insurance commissioner for the state of Washington. Thank you so much for joining us.

KREIDLER

10:12:23
My honor. Thank you so much, Diane.

REHM

10:12:25
Thank you. And now, joining us from her office in Frankfort, Ky. is Audrey Tayce-Haynes. She is secretary of the cabinet for Health and Family Services for the state of Kentucky. I know your state is among the few who said it will go along with the president's change to the new healthcare law. How many people in Kentucky have had their insurance policies cancelled?

MS. AUDREY TAYCE-HAYNES

10:13:01
Hi, Diane. Thanks for having me this morning. Well, yes, the governor did release a statement last week that said that we would support the president's policy on this. However, it is up to the individual insurers to determine whether or not, as commissioner Kreidler said, that they can afford to comply. And just as Washington State has had a very successful rollout, as you know, so has Kentucky.

MS. AUDREY TAYCE-HAYNES

10:13:40
As a matter of fact, we have over 900 small businesses that have already started applications as well as we have -- we're right on the mark of 50,000 folks. We're about 48,000 that have enrolled in health coverage. There's probably somewhere a little north of 200,000 people, by our estimates, that could have gotten a notice from their insurance company that obviously we can't affirmatively confirm.

REHM

10:14:19
So what happens to the folks who've had their policies cancelled? Do you believe they deserve a permanent exception to the Affordable Care Act, or is one year long enough?

TAYCE-HAYNES

10:14:37
Well, I believe the one year extension should give everyone plenty of time to go online and to begin to shop. And, you know, the thing I'm having a difficult time understanding about this is that the policies generally are better and cheaper because most people -- like, in Kentucky, out of our 640,000 uninsured, all but about 50,000 of them would either qualify for Medicaid or for a subsidy.

TAYCE-HAYNES

10:15:10
So I mean, if someone said to me, you can better health insurance overall, even though maybe you've never used -- you don't have cancer, so, you know, you've never had to really utilize your health insurance, the challenge to each of us is we don't know what's going to happen this afternoon or tomorrow to any of us. And so...

REHM

10:15:34
At the same time, there are elderly people who may have their own insurance policies who say, why should I pay for maternity coverage?

TAYCE-HAYNES

10:15:48
Well, you know what, Diane? I am 53 and beyond my own years of being able to have a child myself, and so I'm happy to, as a woman, share in the risk for maternity coverage for others because, you know what, as a woman, we have been rated higher over all of these years anyway. And we've had to pay more. So, finally, I'm not paying more just because I am a woman. So I am pretty excited about that as a woman in Kentucky, as well as in the United States.

REHM

10:16:26
And I wonder whether the policies might include some prostate cancer exams as well.

TAYCE-HAYNES

10:16:38
Well, I'm not going to get into the weeds with you about the policies. They're often referred to as the junk policies, whether or not there are some -- are much better policies than the other. They just may not include behavioral health and substance abuse services to the extent possible. But we want our insurance companies to make the decision based on their business model that will be the least disruptive for them.

TAYCE-HAYNES

10:17:10
And some may be able to continue the coverage for folks and some may not. Regardless, our website and our 800 number is open for business and we are enrolling over 1,000 -- we're completing the enrollment of over 1,000 a day and obviously, we expect that to increase as we get closer to the holidays and to Dec. 15. So I'm concerned that folks are trying keep coverage when frankly they could probably have cheaper coverage if they would just go online. Sometimes I think people are more stuck in the political mud than in trying to just get what's best for them.

REHM

10:17:52
And tell me, finally, why you think Kentucky's system online has worked so well when the federal system has had such problems.

TAYCE-HAYNES

10:18:06
Well, you know, I would like to think that I just have a lot of really smart people working with me and for me, Diane. But I know they do on the federal level as well. You know, in Kentucky, we have been able to create a system that involved a lot of stakeholders. My cabinet has had the experience of creating very large and complex IT systems in the past, and we...

REHM

10:18:32
Well, I want to...

TAYCE-HAYNES

10:18:32
...have -- are able to do this based on our own insurance laws. But the federal plans...

REHM

10:18:38
I want to congratulate you. I'm sorry. We're out of time. Audrey Tayce-Haynes, secretary of cabinet in the state of Kentucky.

REHM

10:19:59
And now turning to our guests here in the studio: Ron Pollack, July Rovner, William Hoagland, and Joseph Antos. I'll start with you, Julie. Remind us how we got to this White House announcement last week on changes to the healthcare law.

MS. JULIE ROVNER

10:20:21
Well, of course this goes back to the president's kind of ill-faded promise now that if you like your health plan you could keep it. I think the president probably was not referring to people in the individual market. He was really referring back to I think the President Clinton's plan from the 1990s which would've really disrupted insurance for just about everyone. And I think the goal with the Affordable Care Act was to not disrupt insurance for most people.

MS. JULIE ROVNER

10:20:45
But of course it does remake the individual market. And I think the president certainly -- if not the president himself, then certainly most of the people who are working on this law knew that there would be some disruption in the individual market. And as I think we just heard, you know, from Kentucky that for most people they would be able to get probably better cheaper insurance, you know, in the new websites. The problem is, particularly in the federal website for those 36 states, you haven't been able to get on to see.

REHM

10:21:16
So explain in brief how the fix is supposed to work.

ROVNER

10:21:24
Well, as my colleague Scott Horsley put it so eloquently, you can -- if you like your insurance, you can keep it but only for one more year and only if your insurance company says so. And then I guess you have to add to that, only if your insurance company says so and your state insurance regulator says so. I mean, so there's a lot of caveats to it.

REHM

10:21:40
So we heard from two states this morning, Kentucky and Washington. What about other states? How many have chosen to accept the fix? How many have said no thank you?

ROVNER

10:21:53
Bottom line is we really don't know. It's really too early to tell. One of the complications is it's not even actually up to the insurance regulator. In many of the states -- I'm hearing about a dozen -- those states have actually written the minimum requirements of the Affordable Care Act into either their state laws or their state regulations. So that means even if the insurance regulator wanted to give these plans another year to go, they can't. They're hands are tied by the state regulations that say, as of Jan. 1, 2014, no insurer can actually sell or renew a plan that doesn't meet these minimum standards.

REHM

10:22:27
Ron Pollack, how many people are affected by these new regulations that President Obama has put forward?

MR. RON POLLACK

10:22:40
We don't know exactly. We can say this much. There are about 15 million people who are in the individual market. So that's the absolute ceiling. How many of them have received cancellation notices, we don't really know. But it's really important to understand that the overwhelming majority of people in this individual market, if they get new coverage, will be better off than they are today. And the reason for that is that the overwhelming majority of people in the individual market have incomes below 400 percent of the federal poverty level.

REHM

10:23:19
So how come so many of these people still don't know that they'd be better off if they simply went to the ACA?

POLLACK

10:23:35
Well, as Julie said, a lot of people are having difficulty getting onto the websites.

REHM

10:23:39
So they don't understand.

POLLACK

10:23:41
So they don't understand. And these folks who have incomes below 400 percent of poverty, they are eligible for substantial subsidies that will reduce their premium costs, or they may be eligible for Medicaid. And, by the way, one of the things about the individual market that commissioner Kreidler indicated is that this is really -- it's the Wild, Wild West of healthcare system.

POLLACK

10:24:09
The overwhelming majority of people in the individual market do not keep insurance for more than a year. And so to have cancellations is a usual experience but the difficulty here is that people have to know that they can get something different. And that different policy is going to be better. And until the website works, that will be difficult.

REHM

10:24:33
All right. And to you, Bill Hoagland. How do you respond to Ron Pollack's characterization of this group as a very tiny group?

MR. WILLIAM HOAGLAND

10:24:45
It represents about 3.9 percent, 4 percent of the total population out there that has health insurance. It is a small group, ten, 15 million people out there. Definitely it is the most difficult aspect of health insurance, the individual, the small group operation. It makes it very difficult to -- this has always been a problem trying to develop a health insurance policy around an individual. The pool is so small.

REHM

10:25:11
OK. So is -- because of this tiny population, is this much ado about nothing?

HOAGLAND

10:25:22
No, it's not much ado about nothing. It is serious for those individuals who have depended upon that health insurance that they have had in the past. It is definitely a major issue. This is the health insurance. They want health insurance, and they should continue to have health insurance.

REHM

10:25:36
So the president met with insurance company executives on Friday. What's your sense? Will the insurance companies go along with it or not?

HOAGLAND

10:25:49
Well, I think the insurance executives would point out to you that in many cases, as has already been pointed out here this morning by Julie and Ron, is that they cannot -- the insurance companies -- the carriers themselves, they cannot necessarily be -- carry this out unless the states approve it. And this is going to create some problems for the states. Now I think also the executives would say, well, let them come and sign up on our website. And, well, that is certainly an approach that an enterprising company would want to do. Come and sign up on my website, whether it's United or Cigna or Aetna.

HOAGLAND

10:26:26
The difficulty there is you have no comparison to what the other plans are offering. And more importantly, finally, I went to a website this morning to check it out, and you do not know what the subsidy is. So you get cited for the cost of the insurance, but you do not know what the subsidy would be. And that's why the real failing here is the government website. If it was operational, this wouldn't say this issue's going to go away, but it certainly wouldn't be as difficult as we are having to have this discussion today.

REHM

10:26:53
So, Joseph Antos, what's your view of the president's fix?

MR. JOSEPH ANTOS

10:27:00
It isn't going to work. It isn't going to work for lots of reasons. The National Association of Insurance Commissioners on Friday raised a concern not about politics but about practicality. What's been overlooked here, I think, is that these are plans that were not supposed to be sold next year. And so that means that the complicated technical process, the actuarial work, and the regulatory process hasn't been done. That usually takes some time. And we only have six weeks between now and Jan. 1.

REHM

10:27:35
OK. So how do you explain then the differing reactions of states themselves?

ANTOS

10:27:42
Well, I think the states that have said we're not going to do this are legitimately concerned about...

REHM

10:27:49
And how about the ones who've said we are going to do this?

ANTOS

10:27:51
Well, to complete the thought, the ones that said they don't want to do this are legitimately concerned about the risk pool in the exchange.

REHM

10:28:01
Feeling that the healthy people...

ANTOS

10:28:02
Will stay out.

REHM

10:28:04
Right.

ANTOS

10:28:04
Exactly. For the states that have said they do want to do this, they're guessing that that risk pool problem isn't such a big issue, but nobody's saying that they're going to be able to get this done in six weeks. And, by the way, that six weeks also includes giving people, the individuals who received the cancellation notice, time to decide whether this is the right thing for them.

REHM

10:28:31
So, Julie, explain the difference between the Upton Bill that passed in the House on Friday and the president's fix and why a Republican bill attracted so much Democratic support.

ROVNER

10:28:49
Well, the Upton Bill would allow plans to be sold to new people, basically any plan that -- even if it doesn't comply with any of these rules, to be sold to anyone. So basically it would undercut the idea of having these new, you know, regulations that plans must be comprehensive, that you can't discriminate based on preexisting condition, that you can't discriminate, as we were just hearing, so the fact that...

REHM

10:29:12
So it would be anything.

ROVNER

10:29:13
That's right. It would be anything. It would only be for a year, but it would be anything.

REHM

10:29:16
Right.

ROVNER

10:29:16
And you can basically -- you know, it undermines the entire sort of concept of having these new regulations. The president's proposal basically only says, if you had a plan as of October 1 of 2013, you can continue that plan for one more year. So it's a very large difference.

POLLACK

10:29:32
You know, there's another difference between the Upton Bill and what the president's proposed. In addition to what Julie said, under the president's proposal you have to provide information to people about the alternatives that are available to them. Under the Upton Bill you don't. And so the Upton Bill is a whole lot more disruptive in terms of the insurance market than...

REHM

10:29:54
And then what about the Landrieu Bill. Will that get a vote? Julie, tell us what that does.

ROVNER

10:30:00
That's sort of in between, the Landrieu Bill. I believe the Landrieu Bill also though says that you have to provide information about what...

POLLACK

10:30:07
Yeah, you do.

ROVNER

10:30:07
...yeah, it has to tell you what protections you would have if you went into the exchanges also. So -- but it's not entirely clear. You know, bottom line though is that these Democrats -- particularly Democrats who are up again new November are very concerned about having something to vote for. Because, you know, we talk about this as a very small number of people but it is still probably in the millions. And a lot of these people are frightened. They heard the president say repeatedly, if you like your plan you can keep it.

ROVNER

10:30:33
And, you know, as we've talked about, yes, people get these cancellation letters every year in the individual market but they didn't every year hear that they could keep their plans. They thought this year would be different. So there are lots of people -- of course people who are satisfied, people who've been able to go to the exchange, find cheaper, you know, policies. They're not the ones who are complaining to their members of congress.

REHM

10:30:52
Ron Pollack, I know you've been a great supporter of the president's Affordable Care Act. But we seem to be in the midst of just enormous confusion, statements, retractions, movements elsewhere. How are people to make sense of this in, as Joe Antos says, six weeks?

POLLACK

10:31:20
Well, I think that if the website get improved...

REHM

10:31:23
If, if.

POLLACK

10:31:24
...and I'm not a technocrat so I'm not sure I can speak to that. But when that happens then I think we're going to be in a very different situation.

REHM

10:31:33
Julie, how close are we to a fix?

ROVNER

10:31:37
I've heard it both ways. Every time, you know, we get on these conference calls daily with the people from the centers for Medicare and Medicaid services, they keep saying it's getting better. Their error rate is down. How fast the pages come up is improving. But, you know, they have now, you know, less than two weeks to their promised completion date.

ROVNER

10:31:54
And it is unclear whether it will be working as well as they say by the date that they say. At that point, they'll only have 15 days for people who want insurance for Jan. 1 will have to sign up to get that insurance for Jan. 1. That's an awful lot of people in a very short time.

REHM

10:32:10
Bill Hoagland.

HOAGLAND

10:32:11
Diane, you know, the military have acronyms for lots of things and one of them is vuca V-U-C-A. It stands for volatility, uncertainty, complexity and ambiguity in a firefight. I think that's where we are with the individual market right now. A lot of volatility, a lot of uncertainty, a lot of complexities for the average citizen out there, plus ambiguity. And this...

REHM

10:32:33
But does that mean it's not fixable?

HOAGLAND

10:32:37
I think it's fixable but probably -- as Joe suggested, probably not in the timeframe that's available to them right now for first of January.

REHM

10:32:45
And you're listening to "The Diane Rehm Show." I want to open the phones now. Lots of folks waiting with questions. First to Luke in Cincinnati, Ohio. Hi, Luke, you're on the air.

LUKE

10:33:02
Hi.

REHM

10:33:02
Hi.

LUKE

10:33:04
I was -- maybe my question has been asked and answered I guess. I was really curious as to given the total folks in the United States, how many -- how big is this problem? And it sounded like it was 15 million and that was a certain percentage of the population of 300 and some million. And then...

REHM

10:33:24
All right. Let's go to Ron Pollack for that.

POLLACK

10:33:27
So the 15 million are not necessarily the people who have this problem. That's the total number of people in the individual market. It's only a portion of those people who have received the cancellation notices. Now, if you go further and you look at which of those 15 million will be eligible for significant subsidies, because they've got incomes below 400 percent of poverty, which is $94,200 in annual income for a family of four. The overwhelming majority of those people will get subsidies when they go on the website. Altogether...

REHM

10:34:05
If it works.

POLLACK

10:34:06
..when it works and it will work. I can't say it'll work this week or next week or next month.

REHM

10:34:10
You know, I want to ask about this website because the Washington Post did a huge article yesterday talking about the failures that this particular company that designed the website had to begin with. Why, if anybody has an answer, was this particular company chosen? Was there a bidding process that was legitimate?

ROVNER

10:34:40
Yeah, there's been a lot of pointing to the federal procurement process. And there's a lot of discussion that this really goes back to the way the federal government -- and it's not just NHHS, it's government -- it's federal government wide, that the procurement process is broken.

REHM

10:34:55
In other words, they did not look at younger companies that might have brought new talent?

ROVNER

10:35:02
It's not that they didn't look at them. It's that younger companies don't want to go through the trouble of actually going through the complexities of the federal procurement process.

REHM

10:35:09
...the procurement.

HOAGLAND

10:35:11
Diane, I would note that the three states that we know, Washington, Rhode Island, Vermont, that have said they will go into this, all have state-run exchanges.

REHM

10:35:19
Yes.

HOAGLAND

10:35:19
And I think at the time that the Affordable Care Act passed, I think the assumption was that states would establish their own exchanges.

REHM

10:35:26
Right.

HOAGLAND

10:35:27
It was not the anticipation that there would have to be 36 states and a federal exchange. So it's like...

POLLACK

10:35:32
But Bill, let's be serious about this. The fact is that the website could work for one state or it could work for 36. It didn't work.

HOAGLAND

10:35:41
I agree.

REHM

10:35:41
All right. Let's go to Jim in Rochester, Ind. You're on the air.

JIM

10:35:50
How are you today, Diane?

REHM

10:35:52
Hi, Jim.

JIM

10:35:54
I just wondered. You had said something earlier that -- about a common objection in the terms of the health plan is from people who are saying, well I'm too old to have a child. Why should I have to carry maternity on my health insurance? But I think what's missing in the counter to that is that there are many diseases that are common to people that are over 50 that the young people are going to be paying for. And the intention is to pool the risk so that everybody benefits in the long run. And I don't hear that coming from anyone on the shows. I listen fairly regularly.

REHM

10:36:29
Isn't that a fair point, Joe Antos?

ANTOS

10:36:33
Well, that is the principle of insurance of course.

REHM

10:36:35
Yeah.

ANTOS

10:36:36
But, you know, we have a problem in this country. How much is enough in healthcare? We do spend more money per person than any other country in healthcare. And I'm not going to get into what results we get but the fact is that those are resources that are also squeezing out other social needs, other needs that people have. And so I think there's a real question in this country about what is the appropriate level. But it's certainly true that what you need is everybody to pay into the pool in order to cover the costs.

REHM

10:37:14
Joseph Antos of the American Enterprise Institute. Bill Hoagland. He's at the Bipartisan Policy Center. Julie Rovner is health policy correspondent for NPR. Ron Pollack of Families USA. More of your questions, comments when we come back.

REHM

10:39:57
And before we go any further, let's be clear about how the coverage itself was mandated. What issues would be covered and which wouldn't. Julie?

ROVNER

10:40:14
There are 10 classes of what are called essential benefits. And this was actually sent out to the Institute of Medicine. And there was a very, very -- they were sensitive to not having it be, basically, too expensive. They really wanted to set this delicate balance. They know that people in the individual market are basically paying for this coverage themselves. Obviously, people under 400 percent of poverty are going to get subsidies. But they were sensitive to the fact that they didn't want to include absolutely everything. But they did want to include things like maternity coverage.

ROVNER

10:40:44
Yes, realizing that, obviously, men will never get pregnant. Women over a certain age are not going to get pregnant again. But feeling that it is a societal good for everyone to chip in; that mothers -- people, women who are pregnant be healthy and that their babies be healthy; that there be mental health coverage; that there be substance-abuse coverage. So these are things that are in the package that have not traditionally been in individual insurance coverage. And, yes, it does make it somewhat more expensive.

REHM

10:41:09
All right. To Bob in Farnsworth, Texas. You're on the air.

BOB

10:41:15
Good morning, ma'am. Thank you for taking my call.

REHM

10:41:17
Certainly.

BOB

10:41:18
I'm retired, and I'm on Medicare. And I've been on the same plan through the same corporation since -- for 52 years come January.

REHM

10:41:27
Which corporation?

BOB

10:41:29
IBM Corporation, ma'am.

REHM

10:41:30
OK.

BOB

10:41:31
And 90,000 retirees have received letters, not from the insurance company, but from IBM, saying: You need to get on another plan by January. You're off it.

REHM

10:41:42
Because?

BOB

10:41:42
And that's not just -- we're on an umbrella plan. They did away with it. They said, now you have to go out through a private healthcare exchange, which they told us to go to. And we have to get new Medicare, new everything. My Medicare plan is zero co-pay, zero deductible, if Medicare covers it. Why would I want to give up a plan like that? But --

REHM

10:42:08
I guess --

BOB

10:42:09
-- the letter did not come from the insurance.

REHM

10:42:11
I guess because you have no choice at this point, Julie?

ROVNER

10:42:16
A lot of companies are -- and people are getting very confused, because they hear the word exchange and they think it's because of the Affordable Care Act. Healthcare costs continue to rise. They're rising slower than they have in a long time, but this whole concept of healthcare exchanges is gaining a lot of popularity. That's part of where this came from in the Affordable Care Act.

REHM

10:42:35
OK.

ROVNER

10:42:36
But people who have Medicare and are going into private exchanges, that has nothing to do with the Affordable Care Act. That's something that their company is doing as a way to save money. And it --

REHM

10:42:46
Exactly.

ROVNER

10:42:47
-- it's not connected to the law.

REHM

10:42:47
So you've got IBM saying: We're simply getting out of the ins --

ROVNER

10:42:56
No, no, no. No, they're changing the way they're doing it. They're not getting out of it. It's an --

REHM

10:42:59
Well, what do you mean, they're changing the way they're doing it?

ROVNER

10:43:03
In some cases -- in some cases, these private exchanges actually will be better deals for many of the retirees. But it's different. It's a wrench for a lot of these people.

REHM

10:43:10
But they're cutting out their retirees.

ANTOS

10:43:14
Well, let's be clear. First of all, Bob is not losing his federal Medicare benefits. We have to be clear about that.

REHM

10:43:21
Right. Right.

ANTOS

10:43:22
And then, but I agree with Julie. What IBM and other companies are doing is they're saying, instead of having essentially unlimited payments for various services, they're --

REHM

10:43:32
For 25 or 30 years?

ANTOS

10:43:35
Well, no, unlimited benefits for -- in that year, for people who are retirees, regardless of the services that they get or regardless of the cost, what they're saying is: We're willing to pay for quite a bit of that. But they're going to put a cap on it.

POLLACK

10:43:51
And, by the way, one of the things that's really important. When we talk about upgrading insurance, you know, because the individual market many people think is insurance that doesn't insure. It's like Swiss cheese coverage. One of the key things that gets changed is that insurers can no longer establish lifetime or annual caps, so that when somebody has a major illness or an accident, all of a sudden, often, they find they have no insurance because they've exceeded the cap. That is one of the key changes that the Affordable Care Act establishes.

REHM

10:44:24
All right.

POLLACK

10:44:25
So that people will be protected.

REHM

10:44:26
Here is an email from Carl in Michigan. "What exactly is wrong with healthcare.gov? I went on the site Saturday, had no problem going through the process. I now know what my subsidy is, what plans are available. I stopped short of signing up for one, only because I want to take more time comparing contrasting plans available to me. The site was quick and twice, when I had questions, I used the chat feature, and both times had my questions answered quickly.

ROVNER

10:45:11
That's right. They have, indeed, fixed -- this is known as the front door, the part where you get on and can basically -- I don't know whether he used the -- whether he created an account and actually looked at his subsidy calculation, which for a long time was not working -- or whether he just sort of browsed the plans, which is much easier. Right now, I think it's -- they're having more trouble with what's called the back door, which is the part where you actually enroll. And I think that's -- they're still having problems there.

ROVNER

10:45:36
There's a lot of concern that if they fix that front door, as it is, making it easier for people to get on and choose a plan, without fixing the actual enrollment part, there's a big concern that insurance companies are going to get kind of garbled enrollment information.

REHM

10:45:49
Here is a Tweet. "Couldn't virtually all of the canceled plans have been grandfathered? It was the insurance, not Obamacare, that caused the cancelations. Joe?

ANTOS

10:46:05
Uh, not at all. There are very tight restrictions that were established in regulations in, I believe it was July or August of 2010, that made it perfectly clear that the way most individual coverage, those kinds of policies, tended to work was when the costs go up, there tended to be an increase, for example, in the deductible or there tended to be an increase in the copayments. And, if you went too far in that direction, and it wasn't very far, then --

REHM

10:46:35
Your plan --

ANTOS

10:46:35
--then your plan wasn't going to be grandfathered.

ROVNER

10:46:37
But many of these plans could have been renewed this year. There were, I think, eight states where they had either restricted or barred early renewals. But many of those plans that weren't technically grandfathered could have actually been renewed this year into 2014. So some of these plans that were canceled actually didn't have to be.

ROVNER

10:46:53
They could have been renewed and they would have been allowed to continue into 2014. The law said what you couldn't do is sell those plans or renew those plans starting in 2014. There's no reason they couldn't have been renewed this year and allowed to continue into 2014.

REHM

10:47:07
And, you know, there continued to be these sort of conspiracy theorists out there. Marilyn in Colorado writes: "You have to understand. Millions of Americans who would refuse to even look at insurance policies on the health exchanges because they get all their news from right-wing media and they're committed to that team. An example is the Atlantic Reporter." Julie, tell us about that story.

ROVNER

10:47:43
Well, there have been, I mean, there have been a number of stories actually there were. And it wasn't just right-wing media. There were, actually, I think one of the CBS stories -- this is now kind of a famous story -- about a woman in Florida who was talking about losing her insurance and how angry she was at losing her insurance. And then several people went back and actually walked her through her insurance. And it was discovered that her insurance wasn't really insurance at all. It was a discount plan. It basically gave her $50 off every time she went to the doctor.

ROVNER

10:48:09
And if she went to the hospital, it would basically pay $50. And she discovered that actually, if she were to go on the exchange and get insurance, she would do much better. So it's -- there are a lot of these people with some of these horror stories that it turned out really didn't have very good insurance at all and really would do better if they were -- once they got on the exchange and discovered what was available to them.

REHM

10:48:27
Ron?

POLLACK

10:48:27
It's really important to keep this in perspective. There are tens of millions of people in the country who have preexisting conditions who can't get coverage today or who have coverage through an employer who are worried about leaving a job. They're going to get protection. There are 48 million people in the country who are uninsured today. The overwhelming majority will get coverage. There are people who are going to now get help with individual coverage because they'll get significant subsidies in the thousands of dollars.

POLLACK

10:48:57
And so what's really important is when someone gets a cancelation notice, they've got to take a look at what the alternatives are. And, when they do, the vast majority will find that they will have better coverage and they will pay less out-of-pocket and premiums because they will get subsidies -- because these subsidies reach deeply into the middle class.

REHM

10:49:19
All right. Now, I want to hear from Josh in Jacksonville, Fla. He's got a very different perspective. Go right ahead, Josh.

JOSH

10:49:30
Hi, Josh. Oh, excuse me. Hey, Diane, thank you for having me on the air.

REHM

10:49:34
Sure.

JOSH

10:49:34
The question that I had was related towards the fact that I hear a lot of numbers, and I don't hear about all the people who went onto healthcare.gov and found out that they couldn't afford the non-cheaper plans that they had out there. Out of all the plans that are on healthcare.gov, there wasn't one that they would actually be able to afford.

JOSH

10:49:57
All I hear is cheaper, cheaper, cheaper Affordable Care Act, but the numbers of people that it's not affordable for and they can't because they're paycheck-to-paycheck, and they can't afford it, I hear no numbers. And anytime the question gets brought up, I hear, I don't have those numbers in front of me. I'm sorry I can't help.

REHM

10:50:14
All right. Well, let's hear what Ron Pollack has to say.

POLLACK

10:50:18
You know, the reason this is going to be less expensive for people is that such a substantial portion of the public has incomes below 400 percent of poverty. They have incomes below $94,200 for a family of four, income below $46,000 as an individual.

REHM

10:50:33
Josh, what's your income? Josh, what is your income?

JOSH

10:50:41
My income is about $24,000 a year.

REHM

10:50:43
OK.

POLLACK

10:50:43
So Josh is -- Josh is a perfect situation where he is going to get a substantial subsidy in the many thousands of dollars that will reduce the -- will reduce premiums for him.

REHM

10:50:52
But guess what? Josh is in Florida. That makes a difference, Julie.

ROVNER

10:51:00
Yeah. Indeed, you may have trouble getting on the website. And it's a state where they're not expanding Medicaid. But also there is a hardship exemption, even if, with the subsidy, it is still too much of his income, he will be, you know, exempt from the mandate. Now, if he still wants insurance, that is difficult. But also because he's under 30, he's eligible to buy a catastrophic plan, which -- although I guess there's no subsidy with the catastrophic plan.

POLLACK

10:51:25
No. No.

ROVNER

10:51:26
But still, he could -- I would be --

JOSH

10:51:28
I'm not under 30.

ROVNER

10:51:30
Oh, I'm sorry. I guess I -- I confused your income with your age. But still, if you, there is a hardship exemption if you can't afford it.

JOSH

10:51:40
Ma'am, but I'm not hearing -- the thing that I'm absolutely still not hearing is that there's no acknowledgement that, yes, there's going to be people out there that it's not cheaper for and that they won't get subsidies. I hear no admittance that there are people that just won't be able to afford it. All I hear is, you should be able to get subsidies. (unintelligible)

REHM

10:51:58
OK, Josh. I want to hear from Joe Antos.

ANTOS

10:52:02
Josh is right. I mean, the question is, how many people can't afford it. Ron clarified for us during the break that about 50 percent of people would be eligible for exchange subsidies. But another 20 percent would be eligible for Medicaid. So that may leave -- and I think this is really kind of questionable whether this number's really accurate -- but maybe a third of the people in the individual market might not be eligible for any subsidy at all. But that doesn't necessarily mean that they can't afford it. I mean, the question is, what do you think you can afford? It's not an easy answer.

POLLACK

10:52:41
And it's going to be different in each location, depending on what plan and what kind of coverage they want. So the key thing is, people are going to have significant choices. There are bronze, there are silver, there are gold and platinum policies.

REHM

10:52:55
Hey, Josh. Have you gotten on to a website?

JOSH

10:53:01
No, Diane. The -- I'm actually one of the fortunate people that their policy wasn't canceled. And so I still have healthcare coverage through my job. And it's not government run. I'm one of the people that looks at the way the government spends money, and I'm thankful that they're not in charge of my healthcare.

REHM

10:53:20
OK.

JOSH

10:53:20
But at the same time, it's kind of like, you know, the Mercedes over here that we want you to purchase, you know, it's -- I'm happy with my Corolla, and it's going to last 300,000 miles.

REHM

10:53:30
And I'm not sure you're going to continue to be happy with that Corolla.

HOAGLAND

10:53:35
And, Josh, this is Bill Hoagland. Let me just say real quickly that, if you have not gotten onto the website, which is a problem for many people out there, of course -- and as Julie said, we're starting to get in through the front door. It's the back door where you have the estimate of the subsidy that's coming. And that's the part that's not working right now. So if you haven't got on, you don't know exactly what the cost is going to be.

REHM

10:53:52
Exactly. And you're listening to the Diane Rehm show. Let's go now to Deanna. She's in Boca Raton, Fla. Hi, you're on the air.

DEANNA

10:54:06
Hi. I'm one of the people that have an individual plan. And it was just raised before the Affordable Care Act to, like, $670 a month. And I just got a letter from my insurance company telling me that they're now offering some lower priced plans with less deductible because they want to keep up with the Affordable Care Act. So this is making even a lot of these private plans competitive. They don't want me to leave and go for the federal plan. They want me to stay with them.

POLLACK

10:54:39
Well, it's not a federal plan. There will --

DEANNA

10:54:42
It is in Florida because we don't have the state. So we're having to use the federal.

POLLACK

10:54:46
Right. Now, Deanna, what -- you're going to have a choice among a wide variety of private plans through this new marketplace. Obviously you may have difficulty looking at the website right now, but that will be fixed.

DEANNA

10:54:57
Oh, no, I didn't, you know, I did it before -- the math before when you could do the trial one. And my insurance would be, like, $218 a month with the silver plan.

REHM

10:55:05
Wow. Yeah.

POLLACK

10:55:07
So that's -- so that will be less expensive, and it means that actually the coverage is going to be better. I think it's very important to take a look at what your options are, and it looks like you are one of those folks who have gotten through and seen what plans are available.

REHM

10:55:24
Exactly. Now, let me ask. What should a consumer do if he or she gets a cancelation notice? Julie?

ROVNER

10:55:35
Well, obviously the first thing to do is to try and get on the website and see what your options are. The website is, as the federal government might say, working better. Remember, it's only those 36 states where they'd have to go through the federal website. The rest of the states are running their own. Some of the states' websites are running extremely well.

ROVNER

10:55:51
Some of them a little bit less well. So this does, indeed, depend on where you live. You know, keep up with your news to see if there's a possibility that if you've gotten a cancelation notice, that your insurer might, you know, uncancel your policy although that seems to be -- that will be the exception and not the rule.

REHM

10:56:09
Bill Hoagland, do you think that the firing of the D.C. insurance commissioner is going to affect thinking in other states?

HOAGLAND

10:56:20
I'm not familiar with all the background on the D.C. commissioner. I understand he expressed some concerns about the president's proposals.

REHM

10:56:27
That's what he did.

HOAGLAND

10:56:28
And it -- because he expressed concerns, I find it very sad that he was dismissed. I think there are concerns out there, serious concerns, and people who manage these very difficult programs have to be willing to express their issues. And I'm just very surprised. Will it affect other states? I don't think D.C. is unique, as you know.

REHM

10:56:48
All right. D.C. is unique in many, many ways. Bill Hoagland, he's senior vice president of the Bipartisan Policy Center. Ron Pollack is with Families USA. Julie Rovner is health policy correspondent for NPR. She's the author of "Healthcare Policy and Politics A-Z." And Joe Antos is with the American Enterprise Institute. Thank you all.

ANTOS

10:57:25
Thanks for inviting us.

GROUP

10:57:25
Thank you.

REHM

10:57:26
And thanks for listening. I'm Diane Rehm.
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