Senate Finance Committee Issues Testimony From Centers for Medicare & Medicaid Services
"Chairman Hatch, Ranking Member Wyden and members of the Committee. Thank you for the invitation to be back in front of this Committee to discuss an issue of vital importance to millions of American families: improving access to high quality, affordable health care. My name is
"I am grateful to the
"I have had the opportunity to see first-hand how the Affordable Care Act has advanced the lives of millions of Americans over its first few years.
* After decades of stagnation, the ACA has provided financial protection and improved access to a regular source of care for millions of Americans, reducing the number of Americans without insurance from 2013 to 2017 from 14% to 8.3% according to the
* The ACA also provided valuable consumer protections to all Americans like prohibiting discrimination against an estimated 130 million people with pre-existing conditions,2 most of whom currently receive employer-based coverage. The law outlawed annual and lifetime policy limits, and the old insurance practice of often arbitrarily excluding coverage of certain benefits like pharmacy, hospital care, or mental health. Before the Affordable Care Act, if Americans could even qualify for individual coverage, they often did not know what they were getting in a plan. They could be charged more for existing illnesses, or could have limitations in their policies that excluded those illnesses altogether.
* The ACA made health care more affordable for millions more Americans. By providing income-based tax credits to people in the individual market, individual buyers were put roughly on par in terms of tax treatment, for the first time, with people who receive employer sponsored coverage. Along with positively impacting job mobility, this significantly expanded health care affordability. In the last open enrollment, nearly 8 in 10 people who bought coverage on the exchange were able to buy a policy for under
"Furthermore, according to the
"These impacts are real. Over and over, when I was at CMS, I met and heard from people who, prior to the ACA, couldn't get insured for a chronic condition, couldn't afford insurance, or couldn't leave their job without fear of being without insurance. Life is immeasurably better for many people as a result of the ACA.
"But as with any major legislation, there are areas ripe to address, some of which I will come to as I discuss policy recommendations. Others like the "family glitch", income cliffs, and certain Tribal issues I encourage addressing, but are beyond the time and scope of this hearing.
"Nor am I here only with the perspective of a former government official. I understand the potential of the private sector because I have worked for one of the largest participants in the health care private sector. Prior to joining CMS, I had a two-decade private sector health care career. Most of my career has been focused directly on the expansion of coverage, including exchange markets, as well as major initiatives to improve health care affordability for Americans. I have been a health care technology entrepreneur and built a company focusing on online consumer access to health care purchasing for the un- and under-insured as far back as the 1990s. I led an insurance company exclusively serving hard-to-reach rural and farming communities. And I helped build a large and successful private sector health care company which contained among other things, a large actuarial consulting business, a private insurance exchange, and consumer transparency tools.
"I have an understanding of how exchanges work and what they need to do in order to be successful from several perspectives--as a regulator, as a market participant, and now as a consumer. If anyone tells you the ACA is failing, doomed, or irreparably broken, I would respectfully disagree and suggest that with the proper management and support, most challenges are addressable. This doesn't mean the ACA doesn't need active management to be as successful as possible. It requires an Administration committed to the goal of getting more people access to coverage, particular as these are still the early years for the program. And, to be successful, we must continually improve and capitalize on lessons learned from the early years of the exchange.
Immediate Recommendations
"As a starting point, I believe we should be open to any improvements to current law, no matter the origin of the idea. As Americans, we all have a rooting interest in improving health care for our families, and in the communities we live in. Any improvements, however, should meet important criteria. We should support policies which are judged by an impartial body like the
"Following my recommendations, I will provide a link to a more exhaustive bipartisan set of recommendations from the
* As a chorus of bipartisan insurance commissioners, governors, and advocates on all sides have indicated, by simply committing to paying Cost Sharing Reduction payments,
* Another bipartisan idea that is proven to bring down premiums for consumers is reinsurance. Particularly in smaller states, the cost of insurance for everyone covered can be impacted by even a small number of expensive patients with complex medical conditions. Innovative efforts, as we have seen in
* Marketing, outreach and in person enrollment support is vital to not only bring down the uninsured rate, but to improve the risk pool. This directly reduces premiums for American families and benefits the
* Due to the foresight of this Committee, we have provisions in the law to allow states to go further and provide local state-based innovations through the 1332 waiver process. This is a significant opportunity, and one the Committee should consider making easier. Only two waivers have been approved, and I know there are states that are quite concerned about the time it takes to approve a waiver, particularly one that looks a lot like a previous waiver. I would support steps to shorten the timeline for 1332 approvals and other common-sense steps to simplify the waiver process, subject to maintaining the critical guardrails that protect consumers. These guardrails are the same ones I mentioned above - (1) increasing the number of Americans with coverage, (2) improving affordability, (3) maintaining or improving the quality of coverage, and (4) doing so in a fiscally responsible manner - that should be criteria for any health care reform proposals considered.
"All-in, while close to 85% of exchange participants don't pay the headline premiums,8 and as a result have not been subject to the widely reported rate increases, taken together, these recommendations represent an important opportunity for
Cost and Coverage: Medium and Longer-Term Reforms
"We cannot simply focus on how insurance markets work if we want to make health care more affordable, and more accessible, to all Americans. We must address the underlying costs of care, where 85% of a consumer's premium is spent.
"We must focus on root cause issues that drive health care costs. Many are well-documented-- poor care coordination, the costs of unmanaged chronic disease, the high administrative burden and complexity of our system, our underinvestment in primary care and the social determinants of health, and the costs of high need patients like those dually eligible for Medicare and Medicaid. Our health care system, in particular, is not well situated to treat people with multiple chronic physical and mental conditions. Ultimately, we need to undergo a major conversion from institutional-based care to keeping people healthy and treating them in comfortable and low-cost settings, where the most successful and satisfying health care is delivered.
"To be effective at this, we must also alter how we pay for care if we want to see better, more affordable results. We must commit to moving to a system where we pay for quality outcomes and reward the smart use of resources. This means paying for care in bundles so physicians and other clinicians work as a team to achieve a better outcome. This means paying for prevention like pre-diabetes care and cardiac prevention. And it means we must address the rising costs of prescription drugs, whose costs put a significant and growing burden on American families and taxpayers.
"We also need to pay special attention to the needs of rural America when it comes to health care. This was one of my priorities when I was at CMS and we began an initiative to focus on the unique competition, access, innovation, and structural health care issues in rural America. I held numerous sessions in rural parts of
"One thing that will not reduce costs is simply reducing what insurance covers or cutting or capping access to vital programs like Medicaid for low-income seniors, children and people with disabilities. We know from experience that when fewer people are covered or have "gotcha" policies, they accrue bills that go unpaid and worse, defer or avoid care until their illnesses are too advanced. This makes health care more expensive for everyone9. Vital programs like Medicaid must always be examined and continually reformed. There are bipartisan approaches that move us beyond the current debate on Medicaid. Dr.
"Ultimately as the title of your hearing indicates, covering more Americans and reducing health care costs are linked. We cannot provide access to the care Americans need without a sustainable system. Likewise, covering fewer people with shoddier insurance only serves to drive costs up.
Conclusion
"The above recommendations are my own. In addition to these recommendations, as a Senior Advisor at the
"Two things stand out from all of these conversations. First, everyone asks for additional certainty out of
"The second consistent theme from the world outside of
"With
* * *
Footnotes:
1 "National Health Expenditure Projections 2016-2017,"
The actual data referenced is in the "NHE Projections 2016-2025 - Tables [ZIP, 298KB]" file, under "Table 17--Health Insurance Enrollment and Enrollment Growth Rates, Calendar Years 2009-2025"
2 "Health Insurance Coverage for Americans with Pre-existing Conditions: The Impact of the Affordable Care Act,"
3 "Health Plan Choice and Premiums in the 2017
4
5 Norris, Louise. "Is the
6 "The Effects of Terminating Payments for Cost-Sharing Reductions,"
7 "
8 "Health Plan Choice and Premiums in the 2017
9 Subramanian, Suhja, "Impact of Medicaid Copayments on Patients with Cancer," Medical Care, Vol. 49, No. 9, 842-847,
10 Slavitt, Andy and
11 "Future of Health Care: Bipartisan Policies and Recommendations,"
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