Print BCTV: ACA Crossroads -- The future of Affordable Care and its impact on state, federal elections

ACA Crossroads

Transcript of BioCentury This Week TV Episode 169




Paul H. Keckley, Founder, Keckley Health Industry Research and Policy Analysis

Judith M. Feder, Professor, Public Policy Georgetown University

Joseph Antos, Wilson H. Taylor Scholar in Healthcare and Retirement Policy, American Enterprise Institute




Health and Human Services

Kathleen Sebelius, HHS Secretary




Steve Usdin, Senior Editor




STEVE USDIN: Will bring Obamacare holiday joy, or will it be the glitch that stole Christmas? I'm Steve Usdin, welcome to BioCentury This Week.


NARRATOR: Your trusted source for biotechnology information and analysis, BioCentury This Week.


STEVE USDIN: The first hard deadline for the Affordable Care Act is only a week away. Anyone buying coverage on the exchanges has until December 23 to sign up if they want coverage to start on January 1. Republicans say web glitches and canceled policies mean Obamacare isn't ready, and should be delayed.


RENEE ELLMERS: If the President won't scrap this law, isn't it time for him to delay it for all Americans before it does further harm?


STEVE USDIN: President Obama says is getting better every day, and Obamacare is here to stay.


BARACK OBAMA: You got good ideas? Bring them to me. Let's go. But we're not repealing it as long as I'm President.


STEVE USDIN: The website may be getting better at signing up customers, but insurance companies are receiving a lot of scrambled enrollment forms. Other questions are starting to surface. Once Americans have signed up, will they get the subsidies they've been promised? Will there be enough healthy young invincibles in the mix to make premiums affordable?


We'll hear three distinct perspectives today. On the left, Judy Feder, a professor of public policy at Georgetown University, and a fellow at the Urban Institute. Dr. Feder served in the Clinton administration, and twice ran for Congress as a Democratic candidate. On the right, Joe Antos, a scholar at the American Enterprise Institute. He's an adviser to the Congressional Budget Office, and a former CBO staffer. He served in the Reagan administration.


And in the middle, Paul Keckley. He recently stepped down as executive director for the Deloitte Center for Health Solutions, where he started the Monday Memo on Health Reform.


We've got a lot to talk about today, let's just get right to it. Secretary Sebelius last week said that 365,000 Americans have gotten insurance on the exchanges. Is that a surge or a blip, Judy?


JUDY FEDER: Oh, I think it's the beginning of the roll. We know from past experience in Massachusetts that most people signed up near the end of the opportunity to sign up the first time, and perhaps thereafter. And we have an enrollment that's open until March, so although we are not quite where we'd like to be in moving that enrollment forward, we are moving right along.




JOE ANTOS: Well, if you're trying to get to seven million people, 365,000 doesn't look so good. However, that's 365,000 after two months of essentially a non-operating website, so it's not too bad. I think the real test is going to be the last few days before December 23rd, when there potentially could be millions of people trying to sign up, and that'll be the first real pressure test of the website.


JUDY FEDER: Also -- sorry, Paul, go right ahead.


PAUL KECKLEY: No, I was just going to say, the key to that seven million is the 2.7 million young invincibles that they need to be part of that seven million. That's a key number for the whole math.




PAUL KECKLEY: So no one knows whether this is an early surge, or it's not going to happen. But if they don't get to some number of young invincibles that's significant, then the math underlying the Affordable Care Act is out the window.


STEVE USDIN: Because the risk pool is going to be just distorted toward older and sicker people.


PAUL KECKLEY: Absolutely.


JUDY FEDER: But we do, now, as I understand it, HHS has not been released the numbers on the distribution of age and other factors, but we do have some early signs from some of the states. And the enrollment of younger populations is looking pretty strong, so I think we've got some reasons for optimism. But again, I think we're going to know more, as Joe said, as we go along.


When you pick the December, the late December date, there is a distinction I talked about in March, people have all the way to March to enroll, but they need to be enrolled by the end of December in order to get cut by December 23rd, I think it is, in order to get coverage January 1st. So we've got some good signs, we've got lots of uncertainty, but we are moving.


JOE ANTOS: Well, of course, will they actually receive insurance by January 1st if they sign up on the 23rd?


JUDY FEDER: We know that's all a challenge, yeah.


JOE ANTOS: It's more than a challenge. The fact is that the original date, December 15th, gave two weeks for all the back-end work to occur. It's very complicated. And if you're going to have a surge of potentially a couple million people all on the last day that paperwork is not going to take a week, or two weeks. It's going to take a lot longer than that.


JUDY FEDER: No, but we also are aware of enrollment issues that go on today in the market, where there's adaptation to some carryover, and some issues. And I think the insurance industry is very concerned, very concerned about getting paid. No question about that.


But I think they are also very desirous of getting these new enrollees, and I believe they are working with the administration to make the system work, as we all should be.


STEVE USDIN: Paul, what do you think?


PAUL KECKLEY: Yeah, I feel sometimes like being caught in the middle is my fate in health reform. Yeah, the insurance companies are doing yeoman things to be ready to notify people, but Joe's right.


The operational logistics of turning in eight days, someone who applies and is assured they have insurance, to be able to walk into that doctor's office, and that doctor know where they sit on that network and how they'll be paid, and what specialist can be referred is an astronomical mountain for the insurance companies to climb. And I suspect it's going to be ugly.


STEVE USDIN: So another thing that the insurance companies are dealing with, that patients are dealing with, that Americans are dealing with is this issue of cancellation, and the president changing the policy and saying that insurance companies could have the option of renewing canceled policies. How's that working out?


PAUL KECKLEY: Depends on in which state, because that announcement, as we all saw said it's not just the president saying the insurance companies can let you continue. It was subject to the state department of insurance allowing that. And now we've got some state departments of insurances that say no, and we have others that are encouraging it. And it typically is falling out into the blue red divide.


JUDY FEDER: So I think that in terms of that issue, which is a real problem for somebody getting a cancellation notice, and sure got a lot of public and political attention, we need to put it in perspective. We're talking --


STEVE USDIN: Let's put it into respectable when we come back.


JUDY FEDER: Happy to.


STEVE USDIN: The Affordable Care Act's success or failure comes down to numbers. How many people prefer a fine to Obamacare? We'll talk about that and more in a moment.


NARRATOR: You're watching BioCentury This Week




STEVE USDIN: We're back debating the Affordable Care Act with Joe Antos, Paul Keckley, Judy Feder. Judy, quickly, you were making a point there about cancellations.


DR. JUDITH FEDER: About the cancellations and the size of the individual or non-group market -- this is where people get coverage when they can't get it through their employers, don't get it. It is about 11 million people. It's the market that everybody recognizes is broken, where you can't get coverage for pre-existing conditions and where many people who want to stay in that market can't stay because the insurers won't keep them. They changed the policy on them.


So what's really of interest here is, as we said earlier, are we going to have a good risk pool in that individual market? And when the regulators are saying no, they don't want to extend the time that people can keep those policies, it's because that's likely to pull some of the healthy who were able to keep them out of this risk pool. And so the challenge is to make that pool whole.


STEVE USDIN: Are we going to have a train wreck then in January when you've got some people who've had policies canceled and their states or their insurance companies aren't renewing them? You've got some people who are signing up for policies on the exchanges on December 22 or December 23. And you're predicting that they're not going to be able to have coverage on January 1?


DR. PAUL KECKLEY: Simply stated, yes. And the reason is the individual market, as you just said, is a mess. It was a mess prior. If you remember, just after the law was passed, a number of states like Maine said the 80% MLR requirement won't work for us. We need 70% or even 60%.


STEVE USDIN: Explain that please.


DR. PAUL KECKLEY: Well, the medical loss ratio requirement of law around the individual market was at least 80% of that premium be spent on medical care. Because there's so much risk, adverse selection, and administrative overhead in the individual insurance market, the cost of running that business is higher than for a group. So most of the states had already determined that the individual market was a problem. And if the economy is moving more toward outsourcing and contract labor and people that are going to buy individual insurance policies who aren't eligible for an employer's policy, then that was on the radar as an insurance industry issue. In my view, what the Affordable Care Act did is kind of artificially make those changes in the individual market tougher to make.


STEVE USDIN: So, Joe, are we going to end up with a situation, starting in January, where we're going to have potentially more people who were uninsured than in 2013?


DR. JOSEPH ANTOS: Well, certainly in the sense that if you have the misfortune of going to your doctor on January 1 or January 2, the odds of being detected in the computer system are pretty low. So if that's not having insurance, then you're uninsured. But I think the question is, what's going to be the practical solution here? And I think that insurance companies will be told by the President that they have to somehow extend coverage. Now here's the problem --


DR. JUDITH FEDER: That's what I said. Cover the whole gap.


DR. JOSEPH ANTOS: Here's the problem. We don't know who these people are. Remember that not everybody who's going to sign up on the exchanges are people who had insurance before. Unlike --


STEVE USDIN: The idea is to get people who were uninsured before.


DR. JOSEPH ANTOS: Right, exactly. So we don't have any records on them. We don't know who they are. We don't know what their address is. And we don't know what their financial situation is, which is the critical thing.


DR. JUDITH FEDER: Actually, if you go back a little bit to when this blew up, a lot of those people were unaware -- because they couldn't get into -- of the options that they've got in the exchanges. So now that that website is up and running, lots of those people I'm confident are in it. And let's recognize the administration had quite a wakeup call. So people, if they've applied, they're making every effort to connect them with an insurer in the way -- and the insurers are responding to that. So let me just go back. I want to go back --


STEVE USDIN: Wait, wait, quickly, Joe was --


DR. PAUL KECKLEY: So you're right. The people who most need insurance have tried really hard. They're the ones with carpal tunnel syndrome. But the reality is that you don't get too many shots at young people; young, impatient people who feel that they're basically healthy and tend not to have a full perspective on reality. And so those are the people who have been turned off. Now --


DR. JUDITH FEDER: Who we think have been turned off.


DR. JOSEPH ANTOS: -- what we don't know is whether the PR campaign, which is what the White House is trying to run, is going to reach those people. But let's put it this way, if the President isn't visiting bars on Friday night, he's going to have a tough time getting young people to sign up.


STEVE USDIN: Paul, quickly, we just got a few more seconds in this segment.


DR. PAUL KECKLEY: Yeah, I feel that young invincibles are not turned on to the need for insurance, based on the studies that we've done. There's clear understanding that there's something going on in the insurance market. And there's a modest penalty. But it's not something that, in the studies that I've seen, have concluded that they're sitting on the Go button, ready to sign up.


DR. JUDITH FEDER: Except for the evidence like I gave you about the states where they didn't have the market being the website problems.


STEVE USDIN: We're out of time again on this segment. We're going to come right back. Obamacare's popularity has been hit hard by the disastrous website launch. Here are the numbers.






NARRATOR: Now, back to BioCentury This Week.


STEVE USDIN: We're talking about glitches and promises with Judy Feder, Paul Keckley, and Joe Antos. So Paul, let's get back first to this issue of the mix of who's going to be in it, because you've got some data about that.


PAUL KECKLEY: Well, the early studies are pointing to a large number of people that had a medical need. And therefore, they were motivated to find a product through the exchange, through a state or a federal exchange. The question is, how many of the total by March are going to be that group versus the normal population? And the early date is, we've attracted a lot of people that have a medical need, which means you're going to have some additional cost.


So I think it's too early to know what the back end of this is going to look like. But we are getting data that on the front end, a large number of these folks have some pent up demand.


STEVE USDIN: And the other issue then, which we talked about earlier -- and I think Judy, you wanted to come back to it -- is overall numbers. The goal of the Affordable Care Act wasn't just to not screw up the healthcare system, to be able to get some people to enroll. It was to have universal coverage. Are we going to get there?


JUDITH FEDER: To greatly expand coverage. And I think that as we're focused here in this conversation on the marketplace is where the challenges have been with the website. We've been disappointed about that. The story that we're missing is the steady expansion in enrollment in the Medicaid program, and the states that have committed to that. And that is for people in states that are expanding.


STEVE USDIN: Even in the states that didn't expand it, we're still seeing big increases in Medicaid so-called woodwork effect. Joe, is that a good thing?


JOSEPH ANTOS: Well, for people who are eligible for Medicaid in the first place, this was a wakeup call, much like the entire Affordable Care Act was a wakeup call to the health industry and employers and just about everybody in the country. So it's making people reevaluate what the situation is. Now, here's the problem.


Medicaid is not known as the health plan that you are eager to get into. The problem is that they pay very low rates to providers. There's very restricted access to physicians. And it's very difficult to get a specialist. So it is not a great health plan.


If we're trying to help the poor, we need to find a better way.


JUDY FEDER: We've got a real difference of opinion on that one. When you look at the evidence that compares the access to healthcare for people on Medicaid to people who don't have health insurance, Medicaid is a big time winner in terms of getting people access to care.


STEVE USDIN: Is that the appropriate comparison to people who don't have health insurance, or is the appropriate comparison to people who do have insurance?


JOSEPH ANTOS: The appropriate comparison is to people who don't have health insurance to see whether they get access to care, and to take it the extra point, Steve, and do the other side as well.


STEVE USDIN: Paul, you look like you want to say something.


JUDITH FEDER: Let me finish the thought and the evidence. The evidence is that when you look at the Medicaid population relative to the uninsured and relative to the insured, in terms of the whether they get access to healthcare, the Medicaid population looks much more like the privately insured population than like the people without health insurance.


STEVE USDIN: Paul, you look like you need to say something about that.


PAUL KECKLEY: Here's the data.


JUDITH FEDER: That's what I was giving you.


PAUL KECKLEY: The Medicaid population is healthier than those without insurance. But the providers who are seeing people without insurance collect about $0.10 on the dollar. Those in Medicaid will pay about $0.70 of the cost, those on Medicare about $0.93 of that cost. And the commercial about 125% of cost.


So Medicaid isn't attractive enough to doctors and hospitals that even with this influx of 9 to 16 million new Medicaid enrollees, they're going to go out of their way to accommodate that demand. That's the math.


JUDITH FEDER: What the reality is, is that we got lots of providers who will take those patients. What we know is that Medicaid deals largely with a set of what we call safety net providers, who have been dealing with them getting no pay from these people.


STEVE USDIN: So one of the other things that's in the Affordable Care Act is, they're trying to have incentives to push people, so-called dual eligibles, who are eligible for both Medicaid and Medicare, into Medicaid programs. Joe, is that a good idea?


JOSEPH ANTOS: This is a project that is said to coordinate Medicare and Medicaid Services for -- these are senior citizens, by and large, people over 65, who have generally serious health conditions. And that's why they are eligible for Medicaid and Medicare at the same time.


STEVE USDIN: We're going to explain that more when we come back. We'll be right back to talk about that, and some predictions for the new year.


NARRATOR: Healthcare is changing, and we are changing too. Each week, watch BioCentury's Affordable Care Update, a special part of every show, dedicated to keeping you informed about this unprecedented transition. And watch all of the weekly updates in one place at any time only at




STEVE USDIN: The Affordable Care Act's been a roller coaster ride. Paul Keckley, Joe Antos, and Judy Feder, I'm going to ask you all what your predictions are for the new year. But really quickly, Joe, let's finish up on the dual eligibles.


DR. JOSEPH ANTOS: All right, so the dual eligibles, these are mostly over 65, people on Medicare, low income, generally seriously ill. They're eligible for Medicaid. There's always been a lack of coordination in terms of financing between Medicare and Medicaid. And that's what this project is supposed to do.


STEVE USDIN: How's the Affordable Care Act, the debacle going to play into the elections? And what would happen if it were to cause the Republicans to take control of the Senate?


DR. JOSEPH ANTOS: So a lot depends on whether, in fact, by the end of March there is close to seven million people signed up and they're the right seven million people. If that doesn't happen, if the website in particular continues to work very poorly, then that carries over to the election. And I think it's really going to force some changes.


I think Democrats will want to have another vote. And that vote will be against the President. And the President might even go along with it.


If the Senate changes hands, obviously, the President will still be President. If the Senate changes hands, they won't get 60 votes. They'll get 52 or 53 tops. So they'll be able to propose things to the President, but he'll be able to reject them.


STEVE USDIN: Judy, how do you think that the Affordable Care Act,, how's that going to play into the --


DR. JUDITH FEDER: I agree with Joe on this one that a lot depends on how enrollment goes forward, how the system works. And as I said earlier, the issue that is driving, I think, the opponents of the law crazy is that, once people have benefits, they're going to be in real trouble trying to take it away. So their choice is going to be, are they for the status quo, to going back to 50 million people without insurance and people denied coverage because of preexisting conditions. Can't take it away if we're rolling.


STEVE USDIN: Paul, is so much of the Affordable Care Act baked in now so that even if Republicans were to take control of the Senate, there isn't really any realistic way to change it?


DR. PAUL KECKLEY: Like any law, it will change. But I want to remind us all that there are 36 governors races in this 2014 cycle. And I suspect health reform will be a bigger issue in those governors races in many cases that in some of these Senate and House races because that's the decision of Medicaid, how you handle these insurance programs, and so on.


DR. JUDITH FEDER: And by the skin of our teeth, in Virginia, we just elected a governor who is committed to expanding Medicaid. So I hope many more states will follow suit.


DR. PAUL KECKLEY: So at the state level, I suspect the Affordable Care Act may be the lightning rod issue.


STEVE USDIN: And that's about Medicaid expansion. Is it also about supporting the Affordable Care expansion, the Affordable Care Act, and getting the websites running, and things like that.


DR. PAUL KECKLEY: Beyond that. It's also there where you license your providers. It's there where all this requirement in the law of transparency is vested. So the states in the Affordable Care Act have a huge responsibility.


STEVE USDIN: Your predictions for the new year, for January -- how's the rollout going to go? What are people going to be talking about come March, May?


DR. JUDITH FEDER: Well, more and more people are going to sign up on both the marketplaces and the Medicaid program. We're going to see more and more people getting insurance. We're going to be dealing with the challenges of implementing this program, which we've heard. We're going to be facing them, but we're going to be dealing with them. And I think some of the reason we see so much political opposition is we know this program is going to be successful. Just going to have to stay with it.




DR. PAUL KECKLEY: I think the year one rollout is going to be ripe with adverse selection, a lot of sicker people and not the number of young invincibles that were desired. I think, to the contrary, Medicaid expansion will prove to be positive, if you believe that access will improve quality of care. But the other parts of the law that don't get as much attention will come in focus next year.


These accountable care organizations, medical homes, bundled payments, avoidable re-admissions, clinically integrated provider entities, they are intended to bend the cost curve. And we know that next year health costs are expected to increase back to 6% a year. They've been less than 4% the past three years. So now the issue of how does the Affordable Care Act reduce cost is going to be a story we'll hear about next year.




DR. JOSEPH ANTOS: Rolling into January, there are going to be thousands of people who will go to the doctor and find that they're not on the books. That's going to be a traumatic experience for a lot of people. Some of them might even be handed a bill that they can't pay.


The problem is that it's hard to identify who really signed up and who really didn't because, unlike the Medicare program, these are folks who aren't already identified. They don't have a Medicare card. We had this problem back with Part D in 2006. But it was easy, because everybody who should have been in the drugstore was there. We knew who they were. And we could straighten out the books.


This is much, much more difficult. And it will go on, potentially for months. And insurance companies are in a lot of trouble because the premiums are set based on, as Paul said, based on a good percentage of low cost people. And they're probably not going to get it.


STEVE USDIN: Yeah, so when we're going into the new year and you're predicting all these things, these happy things, what's your response to what Paul's saying and what Joe's saying --


DR. JUDITH FEDER: I'm listening to them. And we already have been addressing and concerned about cost. And we're seeing -- granted it's a challenge, as everything else is -- we're seeing the lowest rates of cost growth we have seen historically. And we're just going to have to keep it. On the enrollment side --


DR. PAUL KECKLEY: That is not due to the Affordable Care Act.




STEVE USDIN: Is it due to the Affordable Care Act?




DR. JUDITH FEDER: It is a mix of factors. The Affordable Care Act, we all will agree, did slow the growth in Medicare costs.


STEVE USDIN: Do we all, quickly --


DR. JUDITH FEDER: It makes a difference.


STEVE USDIN: We've just got a few more seconds.


DR. JUDITH FEDER: Let me say with the other --


STEVE USDIN: We don't have time, sorry. Do we all agree on that?






DR. PAUL KECKLEY: Per capita, Medicare costs 4/10 of a percent year-over-year last year, the result of the economy, the result of a myriad of things.


DR. JUDITH FEDER: -- CBO and the reductions --


STEVE USDIN: I've got to blow the whistle here. That's all the time we've got. I'm sorry. That this week's show. I'd like to think my guests, Judy Feder, Paul Keckley, and Joe Antos. Remember to share your thoughts about today's show on Twitter. Join the conversation by using the hashtag #biocenturytv. I'm Steve Usdin. Thanks for watching.