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Burwell Lauds Marketplace Competition Despite Co-Op Failures

By Rebecca Adams, CQ Roll Call

October 29, 2015 -- Health and Human Services Secretary Sylvia Mathews Burwell downplayed concerns about the rising number of failures of co-ops, plans that were created by the health care law to increase competition.

So far, at least 10 co-ops have announced that they will cease operating. Another co-op in Vermont never began enrolling consumers.

"Across the country, the marketplace is stable and that there are choices in most counties," Burwell told reporters at a briefing on the next health law open enrollment period, which begins Sunday and runs through Jan. 31.

Many of the nonprofit co-op plans blame the administration for failing to provide all the funds that the Centers for Medicare and Medicaid Services promised to plans as part of the risk corridor program, a temporary initiative in the health law (PL 111-148, PL 111-152). The program is designed to limit insurers' losses and profits by shifting money from those plans with gains above a certain limit to some that lost money.

The program faced a $2.5 billion shortfall this year because Republicans added a provision to the fiscal 2015 spending package (PL 113-235) that blocked the Obama administration from tapping other federal funds to fund the risk corridor program. Without access to other funds, CMS had to apply the $362 million collected from insurers against $2.87 billion in claims.

"We are exploring our options. We believe it is a commitment of the ACA," said Burwell, using the acronym for the health law. She said federal officials are "continuing to examine" potential legislative and administrative fixes.

"Overall, I think the picture is a stable marketplace," said Burwell, despite the co-op failures and anecdotes of places where consumers have few choices for coverage. She said that before the health law was enacted, consumers often had limited options for buying health insurance on their own.

"In a number of places that's improved," Burwell said. "In a number of places, that's still a challenge."

HHS officials hope to highlight the entrance of some insurance companies into the market during the third open enrollment period. The administration will encourage consumers to buy coverage through a national advertising campaign featuring examples of people who are able to buy subsidized coverage. Burwell said that eight in 10 consumers are eligible for subsidies and seven in 10 of the remaining uninsured population could buy a plan for a monthly cost of $75 or less.

The administration is expected to release information about premium rates around the country on Friday.

Burwell will tout the launch of the enrollment season on Sunday at an event before joining her team to monitor activity on the website, which handles enrollment for 38 states. In the past two weeks, she held a meeting at the White House with consumer advocates and a conference call with hundreds of small business owners. She traveled to Texas, which has one of the nation's largest uninsured rates, and her home state of West Virginia. She held a call with religious leaders led by Rev. Al Sharpton to get out the word about marketplace coverage.

Burwell acknowledged that some consumers are reluctant to get covered because the out-of-pocket costs, which tend to be higher than in employer-sponsored coverage, can seem prohibitively expensive.

"Certainly it is challenging," she said. "Affordability is an issue."

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