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NAIC Statement on Obama’s One Year Extension for Existing Plans Announcement

Statement from the National Association of Insurance Commissioners; November 14, 2013:

WASHINGTON, D.C. (Nov. 14, 2013)The following is a statement from NAIC President and Louisiana Insurance Commissioner Jim Donelon on the Obama Administration’s announcement regarding policy cancellations and the role of state insurance regulators.

We share the President’s and Congress’ concerns about policy cancellations and issues including gaps in coverage that may result from them, and fully understand the anxiety of the residents of our states who have received these notices. This anxiety is especially heightened given the issues with the federal exchange.

For three years, state insurance regulators have been working to adapt to the Affordable Care Act in a way that best meets the needs of consumers in each state. We have been particularly concerned about the way the reforms would impact premiums, the solvency of insurance companies, and the overall health of the marketplace. The NAIC has been clear from the beginning that allowing insurers to have different rules for different policies would be detrimental to the overall market and result in higher premiums.

We have expressed these concerns with the Administration and are concerned by the President’s announcement today that the federal government would use its “enforcement discretion” to delay enforcement of the ACA’s market reforms in 2014 for plans that are currently in effect. 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.

In addition, it is unclear how, as a practical matter, the changes proposed today by the President can be put into effect. In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues. We look forward to learning more details of this policy change and about how the administration proposes that regulators and insurers make this work for all consumers.

Kelsey Protests Sebelius’ Memphis Visit

Press release from the Tennessee Senate Republican Caucus; November 1, 2013:

(NASHVILLE, Tenn.), November 1, 2013 — State Senator Brian Kelsey (R-Germantown) announced today that he will appear at the Benjamin L. Hooks Central Library in his district at 1:00 p.m. in protest of the visit of the Department of Health & Human Services Secretary Kathleen Sebelius. Senator Kelsey will also voice his opposition to Medicaid Expansion in Tennessee.

“Given the failure of Secretary Sebelius in designing the healthcare.gov website, I am 100% opposed to her designing an Obamacare Medicaid expansion plan for Tennessee.”

Sen. Kelsey is the sponsor of Senate Bill 804, filed to block Medicaid expansion in Tennessee. 15 of the 33 state Senators are signed on the bill as co-sponsors. The bill is scheduled to be heard in January at the first meeting of the Senate Finance Committee.

Sen. Kelsey represents Cordova, East Memphis, and Germantown. He serves as chairman of the Senate Judiciary Committee.

Alexander to Propose Bill Requiring Weekly ACA Exchange Reports

Press release from the office of U.S. Senator Lamar Alexander, R-Tenn; October 22, 2013:

Bill would require administration to reveal data on exchange enrollment and website problems to public, Congress, and states

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KNOXVILLE, Oct. 22 – The senior Republican on the Senate health committee today announced on a Knoxville radio show that he will introduce a bill requiring the administration to provide weekly reports to Congress and to states with data about Obamacare enrollment, efforts to resolve the site’s technological problems, and information about organizations contracted as navigators.

Senator Lamar Alexander (R-Tenn.) said of his legislation: “As millions of Americans have sat frustrated at their computers and on their phones, wasting hours trying to fulfill the Obamacare mandate and enroll in the exchanges, the administration has refused to provide critical information about what’s going wrong, or has dribbled out news through anonymous statements to reporters. This bill will require the administration to be honest and transparent with the public, governors overseeing state exchanges, state consumer protection regulators, and decisionmakers in Congress. No more hiding the damage of the train wreck—Americans are on this train.”

The bill would require the Obama administration to provide weekly reports to Congress, states, and the public about the 36 federally run exchanges, including easily tracked data such as the number of individuals who have visited the site and the number who have successfully enrolled, their zip code, and the level of coverage they’ve obtained. The reports would also be required to contain information on the department’s efforts to resolve the site’s widespread technical problems.

Recent analysis by an outside firm found that traffic to the HealthCare.gov website fell 88 percent between Oct.1 and Oct. 13, as users were scared off by problems with the site, the Washington Post reported. Less than half of 1 percent of Americans who tried to use the site in the first week were able to successfully enroll, according to the Post.

Yet, as technological problems with the site prevent Americans from being able to satisfy the Obamacare individual mandate and purchase insurance, the administration has provided little to no information about the cause of the site’s problems and its efforts to resolve them, and has provided no information about who has successfully enrolled.

Senator Alexander recently called on the Obama administration to improve the way it provides information to Americans about Obamacare, saying, “This law is about as clear as mud, and instead of helping Americans understand their new obligations, the Obama administration has been burying important changes—not announcing them boldly as you’d expect an administration that’s proud of its new health care law to do. Americans deserve better from the officials who are so committed to implementing this train wreck of a law.”

He noted the requirement that Americans sign up for health insurance by mid-February to avoid the tax penalty was confirmed by an anonymous administration official to an AP reporter on October 9 and the revelation that problems with the federal exchange website were also due to a design failure that needed to be fixed was made to a Wall Street Journal reporter on Sunday, after the administration repeatedly told Americans that the problems were due to volume.

Alexander announced his legislation on the Knoxville area’s Hallerin Hilton Hill Morning Show.

Alexander Wants HHS Secretary Sebelius to Explain ‘Technical Problems’ with Obamacare Exchanges

Press release from the Office of U.S. Sen. Lamar Alexander; October 10, 2013:

Senate, House committee leaders ask Secretary Sebelius to explain the technical failures, administration plans to fix them, and whether the administration went live knowing there were problems with the site
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“We are concerned by recent comments to the media that the system suffers from architectural problems that need design changes. We seek information about these problems as well as whether you still expect individuals to suffer a tax penalty if they do not purchase government-approved health insurance.” – Letter to HHS Secretary Sebelius

WASHINGTON, Oct. 10 – The senior Republican on the Senate health committee and the Chairman of the House oversight committee today called on the Obama administration to provide details on the technical problems that have prevented many Americans from enrolling in the federal government’s health insurance exchange, and to explain whether individuals will still suffer tax penalties for not purchasing insurance.

Senator Lamar Alexander (R-Tenn.), the Ranking Member of the Senate Health, Education, Labor and Pensions Committee, and Rep. Darrell Issa (R-Calif.), the Chairman of the House Committee on Oversight and Government Reform, sent a letter to Secretary of Health and Human Services Kathleen Sebelius requesting information “to help us evaluate the extent of the problems with ObamaCare’s rollout and for us to better determine whether any corrective legislative actions are necessary.”

Alexander and Issa write: “HHS launched healthcare.gov on October 1, 2013, as required by law. From day one, however, healthcare.gov has been plagued by what Administration officials initially referred to as technical glitches. After six days the Administration finally admitted the glitches were ‘design and software problems that have kept customers from applying online for coverage.’ News reports detailed stories of people waiting as long as 36 hours to enroll for insurance, many waiting for hours only to give up. As many as 99 of every 100 applications are not able to be processed, and experts are concerned that ‘federal officials could face a situation in January in which relatively large numbers of people believe they have coverage starting that month, but whose enrollment applications have not been processed.’

They continue: “Among the many problems that have been identified in the media: many tens of thousands of people have started the application process but been unable to create accounts; the system that determines whether people are eligible for federal subsidies or Medicaid has made inaccurate determinations; the exchange will not be able to communicate with state Medicaid agencies until November; drop down tools and identity checking systems have not properly functioned; the website bottlenecks at the account creation stage; insurers are receiving incomplete or corrupted applications; and insufficient capacity has been allocated for the website. The website was shut down for periods on October 5th, October 6th, and on October 8th in order for HHS to attempt to make changes.

Alexander and Issa ask for information including how many people have successfully enrolled in the exchange; details on all technical problems preventing enrollment and the anticipated cost of fixing those problems; whether HHS decided to go live with healthcare.gov knowing there were problems with transmitting data to insurers; and whether individuals who attempted to enroll in insurance through the federal exchange but who were ultimately unsuccessful due to the system’s failures still face a tax penalty if they do not enroll for 2014.

“According to some reports,” they write, “the Administration was repeatedly warned that the federal exchange had significant problems. Insurers complained that during tests of the exchange there were difficulties with transmissions to insurers, with insurers not receiving all necessary data about individuals enrolling in plans during tests. Did HHS go live with healthcare.gov knowing there were problems with transmitting data to insurers? If those problems were resolved during testing, how were they resolved?”

The text of the letter is below:

October 10, 2013

The Honorable Kathleen Sebelius
Secretary
U.S. Department of Health and Human Services
330 Independence Avenue, SW
Washington, DC 20201

Dear Secretary Sebelius:

We are writing to seek information about the federal health insurance exchanges established by the Department of Health and Human Services (HHS). We are concerned by recent comments to the media that the system suffers from architectural problems that need design changes. We seek information about these problems as well as whether you still expect individuals to suffer a tax penalty if they do not purchase government-approved health insurance.

ObamaCare requires millions of individuals to enroll in government-mandated insurance or else face a tax penalty. The law required an online exchange be available by October 1, 2013, for individuals to compare plans and rates. For the 36 states that are not operating their own exchange websites, HHS established healthcare.gov for individuals to shop for insurance that would meet the law’s mandated insurance coverage requirements. A Government Accountability Office report from June detailed that HHS spent almost $394 million over three years in contracts to establish the exchange and its related functions.[1]

Two top HHS officials, Marilyn Tavenner, the Administrator of the Centers for Medicare and Medicaid Services (CMS), and Gary Cohen, the Director for the Center for Consumer Information and Insurance Oversight, provided testimony to the House Committee on Oversight and Government Reform within the past few months suggesting that HHS would be ready for implementation on October 1, 2013. On July 17, 2013, Ms. Tavenner testified that she was “feeling pretty comfortable about the ability [of CMS] to be ready on October 1st.”[2] She further stated that “I want to assure you that [on] October 1, 2013, the health insurance marketplace will be open for business. Consumers will be able to log onto healthcare.gov, fill out an application and find out what coverage and benefits they qualify for.”[3] At a hearing on May 21, 2013, Mr. Cohen testified “I think we are very much on schedule; we are moving forward. We are going to be ready October 1st for open enrollment to begin.”[4] Mr. Cohen also testified that there would not be “any problems with [the] massive amount of data sharing.”[5]

HHS launched healthcare.gov on October 1, 2013, as required by law. From day one, however, healthcare.gov has been plagued by what Administration officials initially referred to as technical glitches. After six days the Administration finally admitted the glitches were “design and software problems that have kept customers from applying online for coverage.”[6] News reports detailed stories of people waiting as long as 36 hours to enroll for insurance, many waiting for hours only to give up.[7] As many as 99 of every 100 applications are not able to be processed, and experts are concerned that “federal officials could face a situation in January in which relatively large numbers of people believe they have coverage starting that month, but whose enrollment applications have not been processed.” [8]

Among the many problems that have been identified in the media: many tens of thousands of people have started the application process but been unable to create accounts;[9] the system that determines whether people are eligible for federal subsidies or Medicaid has made inaccurate determinations;[10] the exchange will not be able to communicate with state Medicaid agencies until November;[11] drop down tools and identity checking systems have not properly functioned;[12] the website bottlenecks at the account creation stage;[13] insurers are receiving incomplete or corrupted applications;[14] and insufficient capacity has been allocated for the website.[15] The website was shut down for periods on October 5th, October 6th, and on October 8th in order for HHS to attempt to make changes.

To help us evaluate the extent of the problems with ObamaCare’s rollout and for us to better determine whether any corrective legislative actions are necessary, please provide the Committees with the following information by October 24, 2013:

  • As of October 9, 2013, at midnight, how many people had successfully enrolled for insurance through the federal exchange? How many people attempted to submit applications?
  • Please describe, in detail, all technical problems (including software and design defects) that are preventing people from successfully creating accounts, applying for insurance, and enrolling in plans. Please describe in detail the administration’s plans to address those problems and what has already been done to fix them. Please include which contractors were involved in the design and operation of those aspects of the exchange and which contractors are involved in correcting the problems.
  • How much has it already cost and will it cost to address the technical problems with the exchange? Does HHS need additional appropriations to solve the technical problems and if not, how will HHS pay for the changes? Please list specific appropriations accounts used.
  • According to several news reports,[16] the system that determines when people are eligible for subsidies to buy insurance or Medicaid appears to be malfunctioning, and thus many people may not be eligible for plans in which they are enrolled. What is your timeline for determining when people may have received inaccurate information about eligibility and for notifying affected individuals? How will individuals be notified?
  • According to a USA Todayinterview with HHS’s Chief Technology Officer Todd Park, the Administration has said it hopes as many as 7 million people will eventually sign up for health insurance through the federal exchange. Yet, the administration only designed healthcare.gov to handle 50,000 to 60,000 simultaneous users.
    1. Why did the Administration build the site to accommodate so few people at a time when it expected many more to apply for insurance?
    2. How much load testing of the exchange was done? What is the maximum number of simultaneous users the exchange was tested to accommodate?
  • According to some reports,[17]the Administration was repeatedly warned that the federal exchange had significant problems. Insurers complained that during tests of the exchange there were difficulties with transmissions to insurers, with insurers not receiving all necessary data about individuals enrolling in plans during tests.
    1. Did HHS go live with healthcare.gov knowing there were problems with transmitting data to insurers?
    2. If those problems were resolved during testing, how were they resolved?
  • For the first five days of open enrollment, the administration insisted enrollment problems were a matter of unexpected volume. In an on the record interview with USA Today published October 6, Todd Park said “These bugs were functions of volume[.] Take away the volume and it works.” On the same day, the Administration admitted to The Wall Street Journalthat capacity was not the only problem, but the exchange suffered from design problems as well.
    1. When did HHS first learn of the design and software problems with the exchange?
    2. Please provide all documents, including emails, referring or relating to the design, software, and capacity problems with the exchange.
  • Will individuals who attempted to enroll in insurance through the federal exchange but who ultimately were unsuccessful due to the system’s failures still face a tax penalty if they do not enroll for 2014? What about individuals who believe they successfully enrolled but later find out they were ineligible?
  • Please provide all documents referring or relating to the testing of the exchange and the federal data hub, including but not limited to contractual terms, reports or other data that were submitted by contractors, internal testing, internal emails, memos, power point presentations, and any communications from third parties such as insurers or other stakeholders on the performance of the exchange.

The Committee on Oversight and Government Reform is the principal oversight committee of the House of Representatives and may at “any time” investigate “any matter” as set forth in House Rule X. An attachment to this letter provides additional information about responding to the Committee’s request.

In preparing your answers to these questions, please answer each question individually and include the text of each question in your response. When producing documents to the Committee on Oversight and Government Reform, please deliver production sets to the Majority Staff in Room 2157 of the Rayburn House Office Building and the Minority Staff in Room 2471 of the Rayburn House Office Building. The Committee prefers to receive documents in electronic format.

If you have any questions about this request, please have your staff contact Stacy Cline of the Senate Health, Education, Labor and Pensions Committee Staff or Brian Blase of the House Committee on Oversight and Government Reform Staff. Thank you for your attention to this matter.

Sincerely,

Sen. Lamar Alexander                        Rep. Darrell Issa

Ranking Member                                 Chairman

Senate Health, Education,                   House Committee on Oversight

Labor and Pensions Committee          and Government Reform

 

Enclosure

cc: The Honorable Tom Harkin, Chairman, Senate Committee on Health, Education, Labor and Pensions

The Honorable Elijah Cummings, Ranking Minority Member, Committee on Oversight and Government Reform

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[1] John E. Dicken, Patient Protection and Affordable Care Act: Status of CMS Efforts to Establish Federally Facilitated Health Insurance Exchanges, GAO Report to Congressional Requesters (June 2013).

[2] Evaluating Privacy, Security, and Fraud Concerns with ObamaCare’s Information Sharing Apparatus, Joint Hearing Before the H. Comm. on Oversight and Government Reform, Subcomm. on Energy Policy, Health Care, and Entitlements, and H. Comm. On Homeland Security Sucbomm. on Cybersecurity, Infrastructure Protection, and Security Technologies, 113th Cong. 20-21 (2013)

[3] Id.

[4] Examining The Concerns About the ObamaCare Outreach Campaign, Hearing Before the H. Comm. on Oversight and Government Reform, Subcomm. on Energy Policy, Health Care, and Entitlements, and Subcomm. on Economic Growth, Job Creation and Regulatory Affairs, 113th Cong. 20-21 (2013)

[5] Id.

[6] Christopher Weaver, et al., Software, Design Defects Cripple Health-Care Website, Wall St. J. (Oct. 6, 2013).

[7] Sarah Kliff, For Some Shoppers, Buying Obamacare is Turning Into a Marathon, Wash. Post Wonkblog (Oct. 4, 2013).

[8] Dan Mangan, 99% of Obamacare Applications Hit a Wall, CNBC (Oct. 4, 2013).

[9] Supra note 6.

[10] Id.

[11] Phil Galewitz, Federal Insurance Marketplace Can’t Yet ‘Talk’ to State Medicaid Agencies, Wash. Post (Oct. 4, 2013).

[12] Supra note 6.

[13] Michael D. Shear, et al., Health Exchange Delays Tied to Software Crash in Early Rush, N.Y. Times (Oct. 7, 2013).

[14] See, e.g., Drew Armstrong, et al., Insurers Getting Faulty Data from U.S. Health Exchanges, Bloomberg (Oct.8, 2013).

[15] Tim Mullaney, Obama Adviser: Demand Overwhelmed HealthCare.gov, USA Today (Oct. 6, 2013).

[16] Supra notes 6 and 11.

[17]See, e.g., Juliet Eilperin, et al., Many Remain Locked Out of Federal Health-Care Web Site, Wash. Post (Oct. 8, 2013).

Stable for Now, TennCare Demands Future Attention

Gov. Phil Bredesen has no illusions about the longterm manageability of TennCare, saying this week, “I think the stuff we did with TennCare bought the state a decade but not more than that.”

The governor’s take on the state’s version of the Medicaid program may come as a surprise to those who assumed TennCare’s major problems were over as a result of major reductions Bredesen made in the program that slowed what had become a runaway train.

But Bredesen, now nearing the end of his term, said the fundamental issues involving health coverage remain.

Apart from the cost pressures already involved in health care, another enormous storm is headed the state’s way with the expansion of Medicaid in the new federal Patient Protection and Affordable Care Act, the law that has become known, for better or worse, as ObamaCare.

Bredesen famously referred to the expansion of Medicaid as “the mother of all unfunded mandates” on states when the bill was being debated in Congress. Now that the bill has become law, Bredesen has taken a different tack, basically saying it’s the law and must be followed, somehow.

Yet through all the concern about what the future holds on the state health care program, for the moment a consensus appears to have formed that the current leadership at TennCare has adroitly managed the operation. Bredesen says so, and so do some people currently running for Bredesen’s job.

“I think one of the issues the new governor is going to have to deal with is basically how do you deal with Medicaid,” Bredesen said. “You know my feelings about using Medicaid as part of President Obama’s expansion. I don’t think it’s the right thing to do. I think it will put a huge amount of pressure on states in the future.

“But that’s something the governor’s got to do. It’s done. It’s the law. It’s over. It’s something the future governor is going to have to deal with.”

The new law calls for establishing health insurance “exchanges,” which will serve as a government-regulated marketplace for buying health insurance. While some aspects of the law have a more immediate impact — such as helping fill the “doughnut hole” in coverage of the Medicare prescription drug plan or extending coverage of children under their parents’ plans until age 26 (due to go into effect in September) — the bulk of the law is scheduled to kick in in 2014.

The time delay has given some who dislike the law an expectation that the law can be changed, so its full impact won’t be known for awhile. But as it stands, the burden will be falling on states to figure out how to follow through on the new law.

“This is not something the federal government can execute. They’re going to need the states to set up the exchanges,” Bredesen said. “Obviously a lot of new people will be coming into Medicaid, and that produces a whole bunch of issues, from rates we’re paying to physicians to other things. So I think there is a whole set of things to be dealt with in terms of implementing the act.”

Bredesen feels good about TennCare’s current leadership, which includes director Darin Gordon.

“We have some good expertise in the state right now, particularly in the form of Darin and his staff over there,” Bredesen said. “I think we’ll get through it but that’s going to take a lot of work.”

One of the candidates for governor, U.S. Rep. Zach Wamp, a Republican from Chattanooga, said this week he, too, is impressed with TennCare’s current leadership, and Wamp gives Bredesen credit for managing the state budget in broad terms, as well as specifically on TennCare.

“Darin Gordon has done an excellent job,” Wamp said. “In fact, the last 24 months at TennCare the program is trending better than it has at any time in its existence. When I had my full briefing with him and asked a slew of questions, I was highly impressed. I think they’re focusing now on more preventive care and wellness, which is something I’m really strong on.

“Frankly, short of the Obama mandate kicking in, I believe TennCare is going in a good direction, but if the Obama mandate kicks in without some relief, if we can’t change that, TennCare is going to get buried with federal mandates. We don’t have the money to pay for those mandates.”

The days of total upheaval at TennCare seem to have subsided, for now.

“We’ve got a good team at TennCare now. It’s been stable,” Bredesen said. “They know what they’re doing. They’re doing a good job. They’re making their budgets. In fact they’re helping us solve some of our other budgets. But that’s going to be a real issue.”

Bredesen was elected in 2002 in great part on his perceived management skills, just as TennCare was spiraling out of control. A key report by consultant McKinsey & Company showed TennCare putting the state on a path to financial ruin. Bredesen responded by cutting more than 170,000 people from the TennCare rolls in 2005. He also put limits on the amount of prescription medications that would be covered, a politically controversial move.

Now, the concern has become that with strides made over a number of years, Medicaid expansion in the new federal law threatens to wipe out previous gains.

Bredesen’s point, as he moves through his final year in office, is that while the state bought time with its changes, the problem of health care costs has not been solved. The new governor will find that waiting for him.