Melissa Bailey Photo
Jennings: 170,000 will be priced out.
When the governor’s Obamacare road show came to New Haven, skeptics like Steve Jennings sounded an alarm: The state is selling out to the insurance industry.
Kevin Counihan, Gov. Dannel P. Malloy’s point man on bringing Obamacare to Connecticut, confronted the skeptics in a visit to Career High School on Legion Avenue Thursday evening. The meeting was the fourth of seven hosted statewide by the CT Health Insurance Exchange to get out the word about key changes looming when the federal Affordable Care Act (ACA, aka “Obamacare”) takes effect in 2014.
Counihan is the CEO of the state’s health insurance exchange, a new Obamacare-created virtual marketplace where individuals and small businesses will be able to shop for health care plans. The ACA requires all states to set up these marketplaces by Jan. 1, 2014, when everyone will be required to buy health insurance — or face a penalty of up to 2.5 percent of their income.
The idea is to enable the uninsured and underinsured to get health coverage. People can start signing up for the exchange next Oct. 1. The cost will vary. A family of four making $46,000 a year would pay up to $346 a month for premiums plus co-pays when people see the doctor, according to information distributed Thursday night. An individual making up to $44,680 a year would pay $335 a month; an individual making $20,665, up to $155.
In a question-and-answer session Thursday night with a 60-person audience, Counihan came under fire for not taking a harder line with the private insurers whose plans the marketplace will offer.
Steve Jennings (pictured at the top of this story), an organizer for the Universal Health Care Foundation of Connecticut, asked Counihan why the health insurance exchange board has decided not to negotiate prices with insurance companies. The board considered the matter and opted to let insurers name their prices.
Jennings said he worries about affordability. People making up to 400 percent of the federal poverty line will get their insurance plans subsidized. But an estimated 170,000 people won’t be able to afford the insurance, he claimed.
“The issue of affordability is a profound one,” Counihan agreed. But he said the answer is not to negotiate rates with insurers.
“Negotiating rates is a bit of an urban myth,” Counihan said. He said in Massachusetts, where he worked on the state’s pioneering universal health care system, insurers engaged in aggressive bidding because there was a “locked-in population” of people who were covered. However, in Connecticut, there is no such “locked-in population.” The world of people who would buy the insurance is undefined.
Liz Keenan (pictured), a lay leader of the St. James Roman Catholic Church in Stratford, cautioned that refusing to negotiate with insurers leads to a problem of affordability. She predicted a “chicken and the egg” problem: If the rates are too high, people won’t enroll, which means there won’t be the demand to enable lower rates. She called on Counihan to negotiate lower rates to start with, to create demand — just as stores drop prices on Black Friday to lure shoppers in the door.
“The concept of negotiation is a seductive concept,” replied Counihan. But health insurance isn’t like buying a new car, he said. Without knowing the health status or age of the applicants, or the type of plans they would buy, “we don’t have a lot to negotiate with.”
Advocates say the population isn’t unknown. They say research has identified the needs of small businesses and individuals likely to buy into the exchange.
Several members of the audience called Counihan’s crew to task for representing insurance companies instead of consumers. The health insurance exchange’s board of directors includes Mary Fox, a former Aetna insurance executive and Robert E. Scalettar, former chief medical officer for Anthem Blue Cross Blue Shield. It has no consumer advocate. Outraged advocates tried unsuccessfully to get the state legislature to expand the board to include one.
On Thursday, Gary Witte asked if any of the former insurance executives are getting retirement benefits from their former employers. He asked if they have a conflict of interest.
“You have a credibility gap,” Witte told Counihan. Though only the legislature can change the makeup of the board, Witte said, Counihan could bring in a consumer advocate as a non-voting member.
“I know there is a perception that the board is sometimes a shill for the insurance industry,” Counihan (pictured) said. But the perception’s false, he claimed: Scalettar and Fox are “among the most aggressive consumer advocates on that board.”
“I appreciate that might seem a stretch,” he said, “but you’re not living it every day.”
Counihan said the board’s meetings are all open to the public, are televised, include a public comment section, and have been attended by consumer advocates. And consumers sit on an advisory committee on Consumer Experience and Outreach, where they’ve been designing the Obamacare web portal.
“I feel that we get very good consumer input,” he said.
Two not-for-profit organizations will offer plans in the marketplace along with the private insurers, Counihan announced Thursday. A website will allow consumers to compare prices and benefits of different plans. All the plans must abide by federal guidelines. That means women will be guaranteed maternity coverage. No one will be denied coverage based on a pre-existing condition. And insurance companies won’t be able to set rates based on an applicant’s health.
Some confusion still abounds about the impending changes.
One woman on Medicare looked through a chart outlining the maximum premiums that low-income consumers will pay. For household incomes up to 400 percent of the federal poverty line, those premiums will be capped. (Co-pays are not capped.) The woman looked at the list and determined she would have to pay up to $1,508 per month under Obamacare.
“Is that true? If that’s true, I will be very upset,” she said.
It turned out to be false.
“You’re not going to lose your Medicare,” assured Jill Zorn of the Universal Health Care Foundation of Connecticut. If you’re 65 and older and on Medicare, you’re not eligible for the exchange. Anyone making under 133 percent of the federal poverty line will be eligible for Medicaid.
The exchange is for individuals from age 18 to 65 and small businesses with one to 50 employees. The goal is to provide a simpler, more transparent system for purchasing health care, said Counihan. He said he plans to continue to spread that message in three more public hearings across the state.
One thing you can always be sure of is that the insurance companies never lose money when changes are made. Every year premiums rise and the insurance companies maintain their profits. I have every confidence that the insurance companies will weather this storm in fine shape and the consumers will bear any additional costs. Having two insurance company executives on the board and not negotiating with the carriers sounds very shady and I think it is unrealistic to expect consumers to feel their interests are being fairly represented.