Washington Health Policy Week in Review Archive

Washington Health Policy Week in Review is a weekly newsletter that offers selected stories from the daily newsletter CQ HealthBeat.

  • April 29, 2013 Issue
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Obama Administration Peppered with Questions on Health Law 'Rate Shock'

By John Reichard, CQ HealthBeat Editor

April 25, 2013 -- The Obama administration recently dealt on multiple fronts with the hot-button issue of rate hikes under the health law, a foreshadowing no doubt of other such days to come this summer and fall as full implementation of the overhaul approaches.

Republicans wasted no time in calling attention to a proposed 25 percent rate hike by Maryland insurer CareFirst Blue Cross/Blue Shield in individual policies to be sold this fall on the state's health insurance exchange. The insurer, which sells 70 percent of the policies sold in Maryland's individual market, blamed the hike largely on the fact that the health law will require insurers to take all comers.

Rep. Andy Harris, a Republican lawmaker from Maryland, confronted Health and Human Services Secretary Kathleen Sebelius with the proposed hike at an appropriations subcommittee hearing last week. Harris juxtaposed the announcement with claims by the administration that the health law means affordable coverage for all.

The 25 percent average hike encompasses a range of a slight decrease for some customers to 150 percent increase for the youngest and healthiest who apply for insurance, Harris noted. "Certainly that person who is getting that 150 percent increase is not going to feel that they are getting quality insurance at an affordable price," Harris admonished Sebelius.

"How am I going to tell them that the Affordable Care Act was actually good for that 25-year-old healthy person?" he asked.

"Well, the company has submitted a filing," Sebelius responded. "And there is a rigorous review process now, so this is the starting place." She added that as a former insurance commissioner she doesn't think the final CareFirst rate hike will be that high.

"The second piece of news I think is that it appears that Maryland will have more competition thanks to the Affordable Care Act than they do right now,'' Sebelius said. Two new companies are coming into the market, and "several other companies have filed rates at the same time that CareFirst filed rates that are significantly lower and don't have the kind of whopping increase that CareFirst has asked for."

Reportedly, Kaiser Permanente will sell nine health plans in Maryland next year and is proposing a rate hike of 4.3 percent without mentioning changes required under the health law (PL 111-148, PL 111-152).

Sebelius added that subsidies are available to help cover premium charges and that cheaper catastrophic coverage policies will also be available to the young.

But the rate issue came up in other ways during the day, including whether members of lawmakers' personal staff would be exempted from a health law requirement that members of Congress get their coverage starting this fall through insurance exchanges.

Sebelius sidestepped a question on her way into the hearing about whether Hill staff should be exempted. "I haven't been directly involved in this," Sebelius said.

White House spokesman Eric Schultz said members of Congress would continue to be required to buy insurance through the exchanges—but did not respond to a question about what would happen to staff members.

"Members of Congress will not receive anything that is not available to the public. The law doesn't allow them to get insurance from FEHB, they are going to get insurance on the market place, just like individuals uninsured and small businesses," he said in a statement, referring to the Federal Employees Health Benefits Plan.

Meanwhile, the top Republican on the Senate Finance Committee sent a letter to Sebelius last week asking why the administration had permitted Massachusetts a three-year phase in period to apply certain rating factors when it had not done so in the case of other states.

Sen. Orrin G. Hatch of Utah said "it seems only reasonable ... that the Department has the same authority to offer flexibility to all states, regardless of whether or not the states had an established exchange prior to January 1, 2010" as did Massachusetts, he said.

The insurance industry has requested such transition periods, saying they would lessen premium hikes under the health law. HHS officials did not respond to a request for comment.

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