Sebelius: ObamaCare Rollout Tougher Than White House Expected

Health and Human Services (HHS) Secretary Kathleen Sebelius said Monday that she did not anticipate how complicated implementing the president's signature healthcare law would be.

"The politics has been relentless and that continues," Sebelius said, according to Reuters. "There was some hope that once the Supreme Court ruled in July, and then once an election occurred there would be a sense that, 'This is the law of the land, let's get on board, let's make this work.' And yet we will find ourselves having state-by-state political battles."

Speaking to students at the Harvard School of Public Health, Sebelius said implementation had been hampered both by the law's slow roll out and red-state governors and legislators who have rejected state-run insurance exchanges. 

"It is very difficult when people live in a state where there is a daily declaration, 'We will not participate in the law,' for them to figure out whether they are going to benefit," Sebelius said.

The HHS secretary said her department was "closely" monitoring state progress on the exchanges and Medicaid expansion, both set to debut at the beginning of October.

“We are doing a lot of very active one-on-one conversations with states around the country,” she said. “It’s a big lift, and I would say it’s a job that no one has ever done in this country before — not to put too fine a point on it.”

Sebelius also defended the law from criticism that health insurance premiums could rise because of the requirements under the Affordable Care Act. Last month, Sebelius became the first Obama administration official to acknowledge that insurance premiums could increase under the law. But Monday, the HHS secretary argued competition would benefit Americans as they sought a healthcare provider.

"For the first time ever in the history of the United States, they'll have to compete for service and customers, not by cherry-picking the market [and] trying to figure out who can only insure people who promise never to get sick," she said.

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White House On Defense After Sebelius Remark On Health Law

The White House insisted on Wednesday that healthcare costs are falling after a member of President Obama’s Cabinet said some people could see their insurance premiums rise under the Affordable Care Act.

"I would actually point to the results that we're already seeing from the Affordable Care Act, which is a savings of $2.1 billion, and the analysis from the [Congressional Budget Office] that actually says, in the future, we're gonna see rates that are lower for higher benefits," deputy press secretary Josh Earnest said Wednesday.

Health and Human Service Secretary Kathleen Sebelius told reporters late Tuesday that “there may be a higher cost associated with getting into that market" where "folks will be moving into a really fully insured product for the first time," according to The Wall Street Journal.

That made Sebelius the first Obama administration official to acknowledge that insurance premiums could increase under the law.

Earnest said he had not read Sebelius’s remarks, but pointed to a blog post from Alan Krueger, the chairman of the president's Council of Economic Advisers, about the slowed growth of healthcare spending in recent years.

"[He] said that, 'Each year from 2009 to 2011 national health expenditure data shows the real rate of annual growth in overall health spending was between 3 percent and 3.1 percent,' which is actually the lowest rate of growth since reporting began in 1960," Earnest said, sidestepping the question of whether there will be an increase in premium costs for some people as a result of the law.

Earnest provided a sharper critique of a report by the Society of Actuaries that showed insurers would be on the hook an average 32 percent more per claims on individual insurance policies because of the law. The study also suggested those cost increases would be passed along to some consumers.

The White House spokesman said he wasn't "particularly surprised" that a study "conducted by a health insurance company that's critical of the Affordable Care Act" would come up with such results.

"The reason that the Affordable Care Act was put in place was to ensure that we were expanding access to healthcare for every American, but also because we wanted to actually protect consumers who were repeatedly victimized by insurance companies," Earnest said. "So it's not particularly surprising to me that an insurance company would conduct a study that was critical of a piece of legislation that was promising to hold them accountable for their actions."

Major parts of the healthcare law are slated for implementation next year. Republican critics have argued that the bill will result in increased rates, especially in the individual and small-group insurance markets.

In the same interview where she conceded that premiums could rise, Sebelius argued individuals "are really going to see much better benefit for the money that they're spending," and said government subsidies would help offset some price increases.

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Sebelius: Some Could See Insurance Premiums Rise

Associated PressHuman Services Secretary Kathleen Sebelius speaks about the federal health care overhaul during a news conference at City Hall, Wednesday, Feb. 20, 2013, in Philadelphia. (AP Photo/Matt Rourke)

Some people purchasing new insurance policies for themselves this fall could see premiums rise because of requirements in the health-care law, Health and Human Services Secretary Kathleen Sebelius told reporters Tuesday.

Ms. Sebelius’s remarks come weeks before insurers are expected to begin releasing rates for plans that start on Jan. 1, 2014, when key provisions of the health law kick in. Premiums have been a sensitive subject for the Obama administration, which is counting on elements in the health law designed to increase competition among insurers to keep rates in check. The administration has pointed to subsidies that will be available for many lower-income Americans to help them with the cost of coverage.

The secretary’s remarks are among the first direct statements from federal officials that people who have skimpy health plans right now could face higher premiums for plans that are more generous. She noted that the law requires plans to provide better benefits and treat all customers equally regardless of their medical claims.

“These folks will be moving into a really fully insured product for the first time, and so there may be a higher cost associated with getting into that market,” she said. “But we feel pretty strongly that with subsidies available to a lot of that population that they are really going to see much better benefit for the money that they’re spending.”

Ms. Sebelius added that those customers currently pay more for their health care if their plans have high out-of-pocket costs, high deductibles or exclude particular types of coverage, such as mental health treatment. She also said that some men and younger customers could see their rates increase while women and older customers could see their rates drop because the law restricts insurers’ ability to set rates based on age and gender.

Most people who buy their own insurance policies will begin doing so this fall through new online marketplaces, which federal officials believe will force insurers to keep their prices down.

“As a former insurance commissioner I have watched what transparency does to a market,” Ms. Sebelius said. “This is the first time ever in the history of the United States that insurance companies have to file their rates, it has to be very transparent, they have to offer the same kind of coverage without 5,000 tiny little lines and internal caps, and they have to compete for customers. And I am a believer in the market strategies that in and of itself will minimize the rate impact.”

As The Wall Street Journal reported last week, some insurers have already begun signaling they could dramatically increase prices for people buying policies in the individual market to compensate for restrictions on how they treat consumers, as well as new fees and requirements that they provide bigger benefits packages.

The Society of Actuaries, a nonpartisan professional association, has issued a new report warning that the cost of medical claims in the new individual-insurance market could rise by an average of 32% per person over the first few years the law is in place, as more people with higher medical needs get coverage, and that the impact will be very different depending on the state. Medical bills are another key factor in determining premiums.

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