Official Says Federal Government Will Be Ready To Run Exchanges

During a Senate Finance Committee hearing on Thursday, Center for Consumer Information and Insurance Oversight Director Gary Cohen said the federal government will be prepared to run health insurance exchanges in 25 states this fall, the Washington Post's "Wonkblog" reports (Kliff, "Wonkblog," Washington Post, 2/14).

Open enrollment in the exchanges under the Affordable Care Act is slated to begin in October, with the marketplaces launching in January 2014 (Attias, CQ Roll Call, 2/15).

Cohen's Comments

During the hearing, Cohen assured lawmakers that federally facilitated exchanges would be ready for millions of individuals to enroll. He said, "We are on track. We will be ready for people all across the country to receive high-quality affordable health insurance starting Oct. 1" (Pear, New York Times, 2/14).

Cohen detailed the implementation efforts to date. For instance, he said testing has begun on a "federal data hub," where the federal government and states can verify if individuals are eligible for new coverage. HHS is working to ensure interoperability between Homeland Security, the Internal Revenue Service and state Medicaid programs -- all of which must be able to submit and access data from the hub.

HHS also has set in place a timeline for health plans that want to operate in the federal exchanges. An application period will begin March 28 and close on April 30, allowing the federal government to make a decision on which health plans to include by July ("Wonkblog," Washington Post, 2/14).

CMS also is creating a "consumer outreach and education plan" that leverages social and traditional media to boost awareness of the exchanges, Cohen said. The campaign aims to direct U.S. residents to HealthCare.gov, the central source of information about the insurance exchanges. An inter-agency work group is working to develop plans and encourage enrollment with help from outside groups, he added (Reichard, CQ HealthBeat, 2/14).

Lawmakers Express Doubt, Concern

Senators from both parties expressed doubt about the federal government's readiness, saying they were concerned about a repeat of the confusion when Medicare added its prescription drug benefit in 2006, according to the Times. Committee Chair Max Baucus (D-Mont.), the chief author of the ACA, demanded more specifics on a timeline, saying, "We've got to get moving here" (New York Times, 2/14).

Sen. Orrin Hatch (R-Utah) cited studies estimating a 30% to 40% increase in premium costs under the ACA, adding that four in 10 consumers might not qualify for federal assistance to purchase coverage in the exchanges. "If the point of the health care law was to reduce costs and increase access, these estimates show that it appears to have already failed," Hatch said. Cohen responded that the ACA contains several provisions to hold down costs.

Sen. Ron Wyden (D-Ore.) warned that low-income individuals might have difficulty finding affordable coverage because the federal subsidies are based on the cost of individual, rather than family, insurance. Cohen noted that the administration is debating giving states flexibility to address the issue (Morgan, Reuters, 2/14).