CMS Administrator Defends HealthCare.Gov Rollout Before House Committee

CMS administrator Marilyn Tavenner apologized to consumers who have tried to navigate HealthCare.gov since it launched October 1 at a hearing before the House Ways and Committee on October 29. Tavenner faced sharp questioning from Republican members of the committee, most of whom challenged Tavenner over statements that President Obama has repeatedly made that people could keep their current individual health insurance policies even after the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) was enacted. Republican committee members related anecdotes of constituents who had received letters from their health insurance providers notifying them that their existing policies would be cancelled as of January 1, 2014, because the policies did not qualify under PPACA’s new rules for qualified health plans.

At least one committee member mentioned media reports that the Obama administration has known since PPACA was enacted that a significant number of people in the individual health insurance market would lose their existing coverage as the law was implemented.

Grandfathered Plans

In a Final rule issued July 19, 2010, in which HHS and other federal agencies set out regulations for preventive health services that were to be provided with no cost-sharing for qualified health plans offered through the health insurance marketplace, the agencies noted that individuals could remain in the insurance plans they had as of March 23, 2010 (when PPACA was enacted). “Group health plans, and group and individual health insurance coverage, that are grandfathered health plans do not have to meet the requirements of these interim final regulations. Therefore, only plans and issuers offering group and individual health insurance coverage that are not grandfathered health plans will be affected by these interim final regulations.”

HHS concluded that, over time, health plans would make changes to their plans that would cause them to relinquish their grandfathered status. At the time, HHS estimated that 18 percent of large employer plans (100 or more employees) and 30 percent of small employer plans (less than 100 employees) would relinquish grandfather status in 2011, increasing over time to 45 percent and 66 percent, respectively, by 2013.

HHS also cited a study that estimated that 40 percent to 67 percent of individual policies terminate each year. Because all newly purchased individual policies are not grandfathered, HHS expected that a large proportion of individual policies sold through the exchanges would not be grandfathered, covering up to and perhaps exceeding 10 million individuals.

In her testimony, Tavenner echoed this statement in the 2010 Final rule, noting that “churning,” i.e., companies or individuals changing policies in the individual health insurance market, traditionally averages 50 percent per year. She also noted that if health insurance companies are dropping existing policies, that the replacement policies offered to individuals likely will have benefits that didn’t exist before, such as coverage for more preventive care, and with no cap on total insurance benefits.

Website Performance

At the beginning of her testimony, Tavenner said, “I want to apologize to you that the website does not work as well as it should.” She defended the rollout of HealthCare.gov, noting that the website was tested throughout its development, including end-to-end testing to make sure that all parts of the website communicated with each other, as well as stress testing and load testing. The biggest surprise was the number of people who accessed the site in its first days.

Tavenner said that the testing included simulations of three times the traffic that goes to Medicare.gov each year during its annual enrollment period; instead, HealthCare.gov received five times the amount of traffic that Medicare.gov receives.

Tavenner said that since October 1 over 700,000 applications for insurance have been submitted either through HealthCare.gov or the 18 state marketplaces for insurance. CMS later said that HealthCare.gov is registering 17,000 people per hour. (Registration is the first step before actually enrolling in a health plan.) CMS also noted that they have added more servers to make the registration process more stable.

Tavenner also said that CMS will be issuing more complete numbers on how many people have enrolled in insurance coverage in mid-November.

There was partisan sniping about the health reform law among members of the committee, with more than one Democratic representative referring to “sanding the edges” of the law to make it work better, and more than one Republican representative talking about “taking a buzzsaw” to the law.