Answers about expansion and exchanges, from the head of CMS

Marilyn Tavenner recently was confirmed by the U.S. Senate as the administrator of the U.S. Centers for Medicare & Medicaid Services (CMS).

It’s a big job, made even bigger by the Affordable Care Act, which is set to be fully implemented in January.

The 91-to-7 Senate vote showed bipartisan support for Tavenner, who had been principal deputy administrator at the agency.

A former HCA executive who began her career as a nurse, Tavenner came to Atlanta on Wednesday and spoke to a conference sponsored by the Georgia Chamber.

She also met with GHN for an exclusive interview, in which she discussed the law’s requirements, the individual states’ decisions on Medicaid expansion, and the challenges ahead as CMS gears up for health insurance exchanges to begin enrollment Oct. 1.

Q: Many states, including Georgia, have decided not to expand Medicaid. How does that impact the overall effectiveness of the Affordable Care Act?

A: When the Supreme Court ruled that the expansion was optional, or up to states, we started to re-project our numbers. It certainly decreases the number of people who will have coverage. But inside each state . . . we’ve tried to meet each state where they are.

If folks want to do a partial expansion, we’re still willing to do that under the old rules. It wouldn’t be at a 100 percent federal match; it would be at the traditional state match.

We’ve tried to send the signal that if you’re willing to do this in stages, we want to be there, we want to help. But there’s no doubt, in the states deciding not to expand, those below 100 percent [of the federal poverty level] will be missing [from coverage expansions].

I think the important thing for us is we have the federal marketplace available in those states, so at least we can pick up folks 100 percent and up, such as [in] Georgia, Louisiana and others, that have elected not to expand.

Fortunately, we have a strong regional office here in Atlanta. Atlanta probably has more of the pressure, because they have responsibility over several states that are not expanding.

With the [health insurance] navigator work, we’ll be working with not-for-profits and other partners to get the word out. We will insure everyone we can.

One of the unintended benefits is that when we start talking to folks, even some of the people currently eligible for Medicaid as it exists today in Georgia will get picked up [for coverage].

Q: Some states are talking about doing an expansion of Medicaid through the private market, with private insurers. What’s the administration’s position on that? 

A: Several states have talked about it. There’s actually one state that’s moving forward – that’s Arkansas. Although it’s still a Medicaid expansion, they’re using premium assistance. It’s been around and available, but it’s never been used on a wide-scale basis. So this will be our first waiver, our first demonstration. It will be on a statewide basis. We are actively working with Arkansas. To be honest, we have not seen any showstoppers. We think it will be the first demo to do premium assistance. This will entitle folks to all the Medicaid benefits and protections. It allows them to do the expansion.

Q: What is premium assistance?

A: Instead of having the Medicaid fee-for-service model, all these individuals will go into some type of private insurance plan.

Q: Many people have expressed doubts that the health insurance exchange will meet its deadlines and will be ready to go as scheduled. 

A: The GAO [Government Accountability Office] had a report out today as well [on exchanges possibly missing the open enrollment deadline Oct. 1].

It’s speculation. We will be ready. Now, will we make modifications as we go along? Certainly. But so far, we have met our deadlines. We have perhaps three regulations to get out. They’ll be coming out – some soon, some over the summer. We’re pretty much on schedule with that. We’re actively testing [systems]. . . .

I’ve just finished a series of calls, talking with each Medicaid director and each exchange director. I’ve got four or five more to go. I’m very encouraged that everybody is meeting deadlines.

Q: Will the exchanges provide a competitive market for insurance?

A: Here’s my honest opinion about that. Today, Atlanta is a classic example – Atlanta will remain competitive. We will have good premiums, and we will have the additional protections of the Affordable Care Act – no pre-existing conditions [that can bar coverage], no lifetime limits. It will have a better product at a competitive price.

There are some marketplaces that are not competitive. In my opinion, this project may take two, three, four years to change a non-competitive market into a competitive market.

But it will allow consumers to start getting educated about what’s available in their market. People start understanding what they’re paying for, what they’re receiving.

I think there will be some large insurers that will come in slower. But I think we’ll see more and more competition.

It’s really very much a private-based model. We’re using private insurers. It will grow over time. But I don’t think noncompetitive markets will become instantly competitive. It will take some time.

Q: There’s a tremendous effort ahead in educating people about the law’s requirements. What are the biggest challenges in this area?

A: Because of all the political theater over the last couple of years, the Supreme Court decision, the election last fall, there was a lot of back and forth. It’s really only been, in my opinion, in the last two months that we’ve had a really clear field about starting to get the message out about the Affordable Care Act and what it does.

Quite honestly, I try not to say the ‘Affordable Care Act,’ because it creates this feeling about whether it’s good or bad. But if I go one step below, about what we’re trying to do, people get interested. Most people want health insurance, they want some protection. They understand the importance of prevention.

I think we spend between now and September talking about what’s beneath the Affordable Care Act – what we’re trying to do – to increase access, improve quality and deal with costs.

In September, we change to ‘You’re John Smith, we want you to sign up for insurance.’ Then it becomes very targeted.

Q: Then it becomes about enrolling people. How will you accomplish that?

A: There are several ways to approach it. The navigators are one. We just put out a $50 million funding opportunity across the federal exchanges. The state exchanges have their own funding pool. There are people who will train. There are associations that naturally will gravitate to this and want to do this. We’re in the process of reviewing those applications now.

The second avenue is the website []. If you and I want to go to the website and sign up, and check to see what we qualify for, we will be able to do it without a navigator, so you can do it independently.

We’ll have a 1-800 call center similar to Medicare numbers today. We have different levels of training and skill sets. If you have a basic question, or if you want to really start to dig into your account, we have different levels of training.

Q: How will you get basic information out to consumers – what they need to pay attention to?

A: We actually started some of that last week. States have started their television and media campaigns . . . State-based exchanges have a great deal of independence.

We’ll be doing that – TV, radio, print. We’ll being doing it through the call center, and through the website.

Q: There are employers trying to get out of some of the law’s mandates. Such as hiring people to work under 30 hours a week, who won’t be considered full-time employees; keeping a workforce under 50 full-time employees, so the company doesn’t have to offer insurance; providing bare-bones plans and driving people into the exchanges. What’s your response to these moves? 

A: For large employers, they had a lot of grandfathering protections. So for them, I won’t say it’s business as usual, and there were certain things they had to add, such as insuring [dependent children] up to age 26.

There are some things that are different for them, but as I remind them, they should also see the cost benefit. We’ve seen the lowest cost increases [during] the last three years. First, folks said it’s the economy [holding the costs down], but now most economists are saying that we can’t say it’s the economy. I’ve tried to make the point that for large employers, I’m not seeing this desire to get out of the business [of providing insurance].

I’m sure they’re looking at the 30-hour issue. That’s a real issue – I’m not making light of that.

If you have less than 50 employees, you don’t have to offer health insurance. We hope you do, but there’s no penalty; you are exempt. That’s the majority of startup businesses.

What we are trying to do is make marketplaces competitive so you want to offer insurance as a recruitment tool, as the right thing to do for the employee, and the employee’s family.

There’s a lot of misconception about who has to pay the penalty. The folks who will have to pay are the people who are above 50 [employees] and choose not to offer insurance, and who have someone who actually goes to the exchange.

That’s a small population of employers. Most employers are either below 50, or fall into those who traditionally offer insurance.

So I think a lot is being made about a very small segment of the market.

Q: You were here recently speaking to large employers. What was discussed?

A: We had a closed meeting at Grady Hospital, and I met with large employers. We had this very good debate back and forth. I was talking with one of them in the hallway [today], and he said, ‘I’m surprised you came back. We gave you a hard time.’ And I said, ‘I was surprised to be invited back.’

I’m OK with getting a hard time. I actually think it was a good dialogue. I wanted to hear from them about kind of the cost trends they were seeing, and they were good. But they did have concerns about the Cadillac tax [on expensive benefits plans] and covering [people’s children] up to age 26. It was an open dialogue at what we need to look at long term, where we can make improvements. It was a give and take.

Q: What do you want to emphasize about all these changes?

A:  I would like to emphasize the points I made about access, cost and quality. Access is one big piece of it, and obviously it’s the part we’re rolling out in the fall. But we’re really trying to look at all three areas.

Folks have been complaining bitterly about health care for years. Everyone complains, but no one really offers a long-term solution. This is an attempt at a long-term solution to a problem this country has recognized for years. Is it perfect? No. Will it have to be modified over time? Absolutely.

But it’s a step forward. We can’t do it without industry support, without advocacy support. I’d like to emphasize we’re all in this together. I want to work together with folks.