Obama Fields Criticism, Declares ACA 'Is Going to Work'

President Answers Questions From WebMD Readers

March 14, 2014

With the enrollment deadline roughly 2 weeks away, President Barack Obama told WebMD in an interview this week that the 4.2 million Americans who have enrolled for private health insurance so far under the embattled Affordable Care Act (ACA) were enough to make the program financially "stable."

"At this point, enough people are signing up that the ACA is going to work," Obama said in the interview, which posted today on WebMD and Medscape (owned by the same parent company). "I'm confident the program will be stable, but we look forward to seeing more and more people take advantage of it as some of the politics of the thing get drained away."

Americans have until March 31 to enroll in a private health plan through a state marketplace, or exchange, to be covered this year. The next enrollment period starts on November 15 for coverage in 2015.

President Barack Obama is interviewed by Lisa Zamosky, WebMD Healthcare Reform Expert.

On March 11, the US Department of Health and Human Services reported that 4.2 million Americans had enrolled in ACA exchange plans as of February 28. The White House hopes its publicity blitz will push the final number by month's end close to the 6 million mark most recently forecast by the Congressional Budget Office (CBO). A year ago, the CBO put the number at 7 million, but that was before the botched debut last October of the federal Web site — Healthcare.gov — where people could sign up for a plan. The advisory firm Avalere Health expects that another 1.2 million Americans will enroll in March, bringing the total to 5.4 million.

Avalere Health Chief Executive Officer Dan Mendelson agrees with the president's pronouncement of ACA stability.

"There's no question about it — this competitive, state-based insurance market is here to stay," Mendelson told Medscape Medical News.

Similar to others, Mendelson acknowledges that who is in the risk pool is just as important as how large the pool is. Obama also said that in his WebMD interview. The exchange plans need young, healthy people, he said, to balance "people who are gray-haired like me and may have some old basketball injuries and aches and pains." The fear has been that the plans will have too low a proportion of premium-paying youngsters to offset older, medically needy enrollees and their high healthcare costs.

Mendelson said that insurance risk pools in some markets "underweight younger people somewhat...but they aren't that far off from a demographic standpoint.

"The risk pools appear adequate at this point," said Mendelson. "The bigger question is whether the people who signed up are unhealthy. We won't know the answer until next year, after the rate setting process for 2015 is concluded."

Robert Zirkelbach, a spokesman for America's Health Insurance Plans (AHIP), a trade association, said his group was reserving judgment on the viability of the exchange plans until enrollment concludes on March 31. Similar to the White House, Zirkelbach added, health insurers were actively encouraging uninsured Americans, especially younger ones, to sign up during March, using television advertisements, social media, and community events to spread the word.

The president's own personal drum beating for ACA enrollment took him this week to the "Between Two Ferns" show on the video comedy Web site "Funny or Die." The shtick by the president and show host Zach Galifianakis on March 11 received mixed reviews, but the sign-up message nevertheless reached a young audience and immediately drove up traffic on the now-functional Healthcare.gov Web site by 40%, according to CBS News.

"Obama didn't really need to be funny because he was the sight gag," noted Mendelson. "I do believe that direct messaging through social media is key. He probably could have started doing this a month ago."

Consumer Decisions About Network Size

In his WebMD interview, the president fielded questions selected from the nearly 5000 submitted by users of the health Web site. Several questions pertained to the limited number of physicians and hospitals in the provider networks of ACA exchange plans, which is a sore point among many insurance shoppers.

Obama replied that private health plans, whether they are employer-based or aimed at the individual market, field a network of providers by their very nature. Americans seeking coverage through the exchanges, he suggested, may find that more expensive plans have larger networks while less expensive ones have smaller ones. "Then you've got to make a choice about what's right for your family," he said.

"It's a consumer decision," AHIP's Zirkelbach said. "Some consumers prefer a small network in exchange for a lower monthly premium."

Obama held out hope in his WebMD interview that health insurers may add more physicians and hospitals to narrow networks as enrollment increases. Mendelson at Avalere Health said although insurers may bump up the numbers to meet federal requirements for patient access and otherwise compete for business, narrow networks are not going away.

"I think the law and other market forces really promote a narrow network product," he said. "Networks are narrowed to save costs and ensure compliance with quality programs. It's easier to enforce quality programs in a tighter network."

Narrow networks have their detractors among physicians, as well as patients. Some health insurers have dropped physicians from their existing networks to field a smaller, "high value" cadre for ACA exchange plans, said Norman Vinn, DO, president of the American Osteopathic Association, in an interview with Medscape Medical News.

The idea is to pick out physicians who deliver high-quality care at a low cost, but the metrics that define "high value" are often based on insurance claims data, which "skews toward cost rather than quality," said Dr. Vinn. Metrics will improve, he predicted, as increased use of electronic health records and patient registries yields more and more clinical outcomes data.

"Spicy Language" About Medicaid Expansion Hold-outs

Obama also responded to complaints from Americans who live in the 25 states that have not expanded their Medicaid eligibility requirements under the ACA to cover more of the working poor. He characterized the hold-out states as passing up a good deal, because the federal government would cover 100% of the cost for the new enrollees for the first 3 years, and 90% thereafter. "For political reasons, a number of states have chosen not to take us up on that," he said.

The president noted that the Supreme Court gave states the option of not participating in Medicaid expansion in its landmark June 2012 ruling on the ACA.

"So we don't have the ability, at the federal level, to pressure those states to do what they should be doing," said Obama. "Hopefully, citizens in those states, as they look at neighboring states that are expanding Medicaid, will say, 'Well, why would you, Mr. Governor, or members of the state legislature, choose deliberately to leave people in our states uninsured?' "

Obama's chiding remarks about the hold-out states struck Mendelson as "pretty spicy."

"I have not heard that language before," said Mendelson. Considering that healthcare coverage for millions of people is at stake, Medicaid expansion "is a major health policy issue, and it's also an election issue," he said.

Much of organized medicine is urging the hold-out states to get with the ACA program.

"We share the president's frustration," said Reid Blackwelder, MD, president of the American Academy of Family Physicians (AAFP). "We've supported Medicaid expansion in all the states."

Extending Medicaid coverage, Dr. Blackwelder said, would take some financial pressure off physicians who now care for the uninsured. AAFP members, he said, see 8 to 9 uninsured or underinsured patients each week. "This care is provided free or at greatly reduced rates," he said.

Some states that previously said "no" to Medicaid expansion have reversed their decision, and Matt Salo, the executive director of the National Association of Medicaid Directors, expects a few more states will follow suit. It would be unfair to characterize the states that choose remain outside the fold, however, as heartless, said Salo, who noted that his organization has no position on Medicaid expansion, especially because its members do not make such policy decisions.

A number of nonparticipating states, he explained to Medscape Medical News, have proposed to partially expand Medicaid coverage in concert with the federal government lowering the income threshold for people to receive premium subsidies for ACA exchange plans. The Obama administration, said Salo, has rejected these compromise proposals, prompting charges of inflexibility.

"I think anytime you can declare that there are heroes and villains in public policy, you're not looking at things clearly," said Salo.

No Mention of the Health Insurance Head Tax

Obama's WebMD interview also touched on employer-sponsored health plans. He was confronted with the case of a Nevada resident who complained that the cost of his company plan has skyrocketed since Congress passed the ACA. Was he right to blame this on healthcare reform?

"No, he's not," said Obama. "There's nothing in the ACA that would impact an employer-sponsored plan, other than making sure [it] is actually providing a certain level of coverage."

The president said average premiums were rising 15% a year before the ACA, with employers shifting more costs to employees in the form of higher deductibles and co-pays. However, overall healthcare costs, including those in the private insurance sector, have risen more slowly during the last 3 years than any time since 1964.

Obama was correct in saying that the ACA increased the costs of employer-sponsored-insurance in terms of coverage levels, said AHIP's Zirkelbach. Since January 1, he said, all health insurance policies sold to individuals and small employers (self-funded plans of large employers are excluded) must offer a minimum set of benefits set forth in the law. However, the president failed to mention another cost-driver: a tax that all health insurers must pay on each of their insurees. According to AHIP, the tax will amount to $8 billion industrywide in 2014, increase to $14.3 billion by 2018, and eventually exceed $100 billion over the next decade.

Mendelson noted Obama's omission as well.

"The tax is significant," he said. "It did increase premiums in 2014." However, he complimented the president "on the level of detail that he commands" on the insurance industry. "A lot of what he said is absolutely true."

Medscape and WebMD did not receive funding or financial support of any kind related to WebMD's interview of President Obama, and are solely responsible for its content.

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