Sebelius, Hudgens spar over exchanges

Print Friendly and PDF By: Andy Miller Published: Aug 13, 2013
Kathleen Sebelius

Kathleen Sebelius

U.S. Health and Human Services Secretary Kathleen Sebelius on Tuesday criticized Georgia officials for what she characterized as a passive approach to the state’s upcoming health insurance exchange.

Exchanges, also called marketplaces, will begin enrolling consumers Oct. 1. The Affordable Care Act (ACA), sometimes called Obamacare, provides for an exchange in each state.

The federal government does not have the authority to change or reject premiums for a state’s insurance exchange once the rates are approved by that state, said Sebelius, speaking at a news conference in Atlanta on the ACA.

But she added, “I think it’s unfortunate that in a state like Georgia, they decided that they did not want to participate even in the plan management aspect of the new marketplace program. Because with an elected insurance commissioner, and the authority to do rate review, I think that would have been potentially beneficial to customers here.’’

Georgia Insurance Commissioner Ralph Hudgens recently approved the proposed insurance rates in the state’s exchange. But he earlier had asked HHS for a delay in its July 31 approval deadline, and said the insurers’ filings contained “massive rate hikes’’ for Georgians. He blamed the ACA.

Sebelius noted to reporters that she used to be the elected insurance commissioner of Kansas and “did this work for a long time.”

“We are seeing a difference between states who are kind of active purchasers and really engaged in oversight, and other states,’’ she said.

Hudgens, through a spokesman, issued a statement Tuesday on Sebelius’ remarks.

 “I hoped Secretary Sebelius would respond to our request and delay the implementation of the exorbitant rates that were forced on our citizens,” said Hudgens, a Republican. “Instead she is ignoring credible reports from Georgia and other states — showing that she has succumbed to Obama’s Washington, D.C.,  wishful thinking.

“Day by day we are witnessing delays and failures in the rollout of Obamacare,’’ Hudgens said. “Instead of defending the indefensible, I urge the secretary to focus on unwinding the damage that has already been caused.’’

Georgia, like many other states, has opted to have the federal government run its exchange, though states have the right to run their own.

Bill Custer, a health insurance expert at Georgia State University, said the ACA gives an insurance commissioner or a state-run exchange the power to approve rates. “Some states have negotiated rates,’’ he said.

In Maryland, the insurance commissioner reduced the premium rates proposed by every insurance carrier in the individual marketplace, some by more than 50 percent, according to an analysis by Maryland officials. Maryland is running its own exchange.

In approving the rates in Georgia, Hudgens declared that “Obamacare will inflict substantially higher health insurance costs on Georgia consumers.’’

He added that without a federal extension, he had no choice but to approve the proposed premiums. He told GHN that his agency had four independent actuaries review the rates submitted for the health insurance exchange in Georgia, and that six of the seven health insurers had “reasonable’’ rates.

According to an article by McClatchy Newspapers, Sebelius recently said that some state reports blaming Obamacare for sharply higher health insurance premiums next year were “factually incorrect.” She didn’t mention which states she was referring to, McClatchy reported.

“Erroneous information is being advanced as if these are the final rates available in the marketplace and this is what consumers will be paying,” Sebelius said in the McClatchy report. “That’s just not accurate.”

She and other administration officials have noted that many individuals will get subsidies to lower the ultimate price they will pay for coverage in the exchanges.

HHS is currently reviewing the solvency of the health plans and the adequacy of their networks and benefits, Sebelius said Tuesday. She added that the exchange process for individuals and small businesses has fostered increased competition among insurers nationally.

Georgia was the only state that asked for a 30-day extension to continue to analyze the rate increases. Hudgens said he wanted Sebelius to review the Georgia premiums as well.

Nationally, premiums in the health exchanges have been reported higher than current rates in some states but lower in others. The insurance commissioner in Florida said the individual market will see rate increases of 30 percent to 40 percent for next year.

Hudgens said that under the new rates, people under 35 will see increases of more than 100 percent. Middle-aged people will see hikes of up to 100 percent, and older residents will face increases of up to 40 percent, he said.

To decrease the number of uninsured Americans, the ACA requires most people to have health coverage or pay a penalty. But Hudgens predicted that because of rate increases in Georgia, many young people will still skip the coverage and instead pay the penalty, which is $95 or 1 percent of household income, whichever is greater.

A consumer advocacy group Tuesday said some opponents of the ACA were treating the law “as a political football.’’

“In states that have opted for a state-based exchange and an active, hands-on role in ACA implementation, the early results show robust competition, competitive rates, and a cohesive effort to maximize health insurance enrollment,’’ said Cindy Zeldin of the group Georgians for a Healthy Future.

“It is disappointing that Georgia policymakers have chosen against going to bat for health care consumers in this way,’’ Zeldin said.

 

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