Off the Charts Blog | Center on Budget and Policy Priorities

Starting in October, millions of uninsured Americans will be able to enroll in private health coverage through health reform’s new health insurance marketplaces (also called “exchanges”).  But a program designed to help people apply for and enroll in coverage has come under fire, despite its origins in other successful enrollment efforts.

Under health reform, so-called “navigators” — including community and consumer nonprofits, unions, and trade groups — will help people sign up for insurance through the marketplaces, understand their options, and enroll in the right plan.  Critics contend that these assisters could provide poor-quality services or take business away from insurance agents.  But past experience, coupled with the rules that have been proposed to govern the navigators’ work, shows that those concerns are unfounded.

The exchange model included navigators because similar “helper” programs have worked well to connect people with the programs and services for which they’re eligible, including Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).  For example, the federally funded and administered State Health Insurance Assistance Program offers one-on-one guidance to Medicare beneficiaries in every state.  And similar assister programs have played a significant role in increasing enrollment in Medicaid and CHIP across the country; some 86 percent of eligible children are now enrolled in Medicaid and CHIP, an all-time high.

The Department of Health and Human Services based the navigator program under health reform on these successes and proposed rules that would help ensure that the assisters will be professional and well-trained.  The proposed rules create robust training standards to prepare navigators to provide high-quality assistance and strong conflict of interest standards to ensure that navigators act in consumers’ best interests.

Contrary to criticisms, the navigator program is well designed.  These assisters will help uninsured people find — and join — the plan that’s right for them.

A House subcommittee is putting health reform in the hot seat again today, when it holds a hearing on the “looming premium rate shock” that health insurers have warned about.  But widespread rate shock isn’t looming.  In at least a few states where insurers have already proposed their 2014 premium rates, the doomsday predictions of skyrocketing premiums have not materialized.

Yes, a relatively small number of people with coverage in the existing individual insurance market can expect premium increases in 2014, particularly if they are young and healthy, are not eligible for new federal subsidies or expanded Medicaid coverage, and have a relatively skimpy plan today.  But others will pay less, and still others will be able to get better benefits for about the same premiums.

Moreover, health reform means that uninsured people and those who have health problems will no longer be shut out or priced out of the individual insurance market.  Millions of people will be eligible for new federal subsidies to help them pay their premiums and cost-sharing charges, which will offset supposed rate shock for many people.

The House Energy and Commerce Oversight and Investigations Subcommittee, collected a trove of documents from insurance companies to prepare for its hearing today.  The documents tend to emphasize the largest potential rate increases and the types of people — men, in particular — who may experience them.  Insurers developed many of these projections as the industry was lobbying to repeal or delay specific provisions of the health care law, such as the health insurance tax and new restrictions on what older people can be charged for coverage compared to younger people.  They don’t necessarily reflect the premiums these companies actually plan to charge consumers in 2014, and it’s not clear how many of the higher-rate scenarios will actually occur.

Now, the companies are preparing to sell insurance in a reformed marketplace.  We are starting to see the actual premiums that insurance companies want to charge next year, and greater transparency and competition are helping tamp down premiums, at least in some states.  In Washington state, some people would pay less in premiums or pay about the same prices for more comprehensive coverage if recently proposed premiums take effect, in contrast to what the industry had predicted.  And in Oregon, after the insurance department posted proposed rates from various insurers, two companies with relatively higher premiums said they would redo their requests and submit lower rates after seeing their competitors’ rates.

In both of those states, regulators are reviewing the insurers’ rate proposals to decide whether to approve them under health reform.  Other states are doing the same, so more data points are on the way.  We expect that they, too, will show little evidence of widespread rate shock.

Health care cost growth has slowed substantially, as the latest projections from the Congressional Budget Office (CBO) make clear  Since late 2010, CBO has reduced its projection of cumulative Medicare and Medicaid spending over the 2011-2020 period by $900 billion (or nearly 10 percent over that period).

That date’s important because it was in late 2010 — and based on CBO’s August 2010 projections — when fiscal commission co-chairs Erskine Bowles and Alan Simpson issued their original budget proposal, which called for over $300 billion in Medicare cuts and nearly $60 billion in Medicaid savings through 2020. The original Bowles-Simpson proposal is often considered an appropriate benchmark for evaluating other deficit-reduction plans.

The figure below compares CBO’s Medicare and Medicaid projections from August 2010 with the projections that CBO released last week.  (The note to the figure explains adjustments that we have made to provide comparability.)  Medicaid spending is $311 billion lower, and Medicare outlays have come down by $590 billion — far more than the savings that Bowles-Simpson recommended.

No one knows how long this good news will continue.  Some analysts conclude that fundamental changes in the health care system are responsible for most of the slowdown in cost growth.  Others find that the recession is the primary factor, with systemic changes less important.

Even if cost growth remains moderate, however, Medicare and Medicaid spending will keep rising as more baby boomers become eligible for benefits.  Making the U.S. health care system more efficient thus remains a major budget challenge.

But CBO’s new projections provide further evidence that Medicare and Medicaid are not in crisis.  Responsible reforms, such as those in President Obama’s budget (which would produce $400 billion in health care entitlement savings in the next ten years and $1trillion in savings in the subsequent decade), can help restore fiscal responsibility without shifting costs to vulnerable beneficiaries or states.  There is no need for sweeping and misguided changes, such as establishing a per capita cap in Medicaid or raising the age of eligibility for Medicare.

The House is expected to vote today, for the 37^th time, to repeal part or all of health reform.  Nevertheless, in the nearly two and a half years since the first such vote, health reform has made significant progress in achieving its basic goals: helping more Americans get affordable coverage, protecting consumers, and slowing cost growth across the health care system, both public and private.

Here’s a look at some of health reform’s accomplishments to date:

• Health insurance for millions of young adults. Before health reform, young adults were more likely to be uninsured than any other age group. To help address this problem, health reform requires insurers and employers that offer dependent coverage to allow parents to include children up to age 26 on their insurance plans.  That’s a big reason why 3.1 million more young adults had health insurance in December 2011 than in September 2010, according to the Department of Health and Human Services (HHS).

• Free preventive care for tens of millions of Americans. Insurance companies now have to cover preventive care services at no charge, and Medicare provides preventive services without cost sharing, too.  As a result, nearly 105 million Americans received free preventive health care in 2011 and 2012, according to HHS.

  Preventive care includes screenings for chronic illnesses like diabetes and cancer, routine vaccines for adults and children, and other recommended care for kids, such as regular doctor visits.

  Better access to preventive care will help millions of families with their budgets and likely produce other benefits, such as fewer unnecessary deaths from disease, less spending on costly and avoidable illnesses, and a healthier population overall.

• Protections for children and adults with serious illnesses. Health reform bars insurers from denying coverage to children with pre-existing health conditions like cancer, autism, or diabetes.  As a result, for the first time in most states, families with children with serious illnesses, chronic conditions, or special health care needs can buy coverage for their children in the individual health insurance market.

  Also, health reform’s ban on “lifetime limits” on health benefits means that people who get a serious illness won’t have to worry that their benefits will run out or that expensive treatments will push them into bankruptcy — or worse, that coverage limits will prevent them from getting lifesaving care.

• More affordable prescriptions for more than 6 million seniors. Health reform has begun to close the “doughnut hole,” the gap in Medicare prescription drug coverage that many seniors experience once their annual drug costs exceed $2,930.

  Before health reform, seniors had no additional coverage until their costs hit about $6,600.  Now, seniors receive a 52.5 percent discount on brand-name drugs and a 21 percent discount on generic prescription drugs while they are in the coverage gap.

  More than 6 million Medicare beneficiaries have saved more than $6.1 billion as a result of these changes, according to HHS.

• Initial steps to help slow health care costs. Some of health reform’s cost-control provisions, such as cutting overpayments to the private insurance plans that participate in Medicare, are already producing savings.  Other steps are underway to make the health care system more efficient by rewarding effective, high-value health care, although they may not yield results for several years.

  For example, Medicare is cutting payments to hospitals with high readmission rates in order to encourage them to prevent more avoidable readmissions.  Also, many physician-led “accountable care organizations” are up and running.  These organizations are structured to encourage health care providers to take responsibility for the cost and quality of care they deliver, potentially reining in costs.

Related Posts:

• User-Friendly Applications Will Help Uninsured Gain Coverage
• Exchanges Will Offer Consumers Better Choices in Every State
• Want More Low-Income Workers to Have Health Coverage? Expand Medicaid.

The Department of Health and Human Services (HHS) today released the revised forms that people will use to apply for health coverage through the new health insurance marketplaces (also known as exchanges).  These relatively short, easy-to-understand applications are a big improvement over the drafts that HHS released for comment in January.

Applications will be consumers’ first stop to getting the coverage they’ll qualify for, so it’s important that they’re well-designed and simple.

Single adults who are not offered health coverage at work will have the easiest option — a new “short form” that offers a streamlined route to health coverage, similar to the 1040EZ for taxes.  This application will make it easier for the millions of uninsured, single adults without children who meet the income eligibility standards to get help paying for coverage through the marketplaces or Medicaid.

The revised forms incorporate many of the suggestions that we and other organizations provided to improve the draft applications.  The questions and instructions are clearer, unnecessary questions have been dropped, and the overall design should be easier for consumers to follow.

The marketplaces will begin accepting applications on October 1, 2013.