Highlights Improvements and Protections to Consumers in
Individual Marketplace Under the Law
Congressman Ben Ray Luján of New Mexico’s Third District and a member of the Energy and Commerce Committee participated in a hearing yesterday in which Health and Human Services Secretary Kathleen Sebelius testified on the Affordable Care Act. Below is the video and transcript of Luján’s exchange with the Secretary, in which they discussed important consumer protections under the law and their commitment to preventing and combating fraud.
The text of the exchange is below:
Luján: Madam Secretary, I was intrigued by a line of questioning by Congressman [Gene] Green asking questions about the individual marketplace. How volatile was the individual marketplace before the Affordable Care Act became law?
Sebelius: I would say it wasn’t a marketplace at all. It was unprotected, unregulated, and people were really on their own.
Luján: Madam Secretary, the Kaiser Family Foundation reports that over 50 percent churn – out of individuals that have coverage in the individual market – churn out of coverage every year. They lose coverage, they are priced out, or drop it. Is that consistent with what you are aware of?
Sebelius: That is an accurate snapshot. About a third of the people are in for about 6 months and over half are in for a year or less.
Luján: So individuals that were in the individual marketplace before the passage of the Affordable Care Act did not have the same protections as those that were in group coverage?
Sebelius: That’s true.
Luján: And would those individuals in the individual marketplace sometimes have higher copays?
Sebelius: Higher copays, unlimited out-of-pocket costs for often coverage that was medically underwritten or excluded whatever medical condition they had in the first place.
Luján: So these were typically one-year contracts. If they use the plan because they got sick or in a car accident or a victim of domestic violence, sometimes they would be thrown off their plan or their rates would go up?
Luján: I think that’s important to note, Madam Secretary. And I’m intrigued, as well, that my understanding is last month HHS conducted an analysis that found that nearly 6 out of 10 uninsured Americans getting coverage through the marketplace will pay less than $100 per month. Is that correct?
Sebelius: They will have a plan available for less than $100 if that’s their choice, yes.
Luján: And that number would be even higher – would be better – if more states chose the option of using federal funds to expand Medicaid to cover their low-income population?
Sebelius: Very definitely. That’s just a marketplace snapshot. Those are people who will be in the marketplace.
Luján: Madam Secretary, I don’t think that I’ve heard anyone from the other side of the aisle today, my Republican colleagues, ask you, “How can Congress work with you and support you in fixing this website and fixing this problem.” I hope that we all agree we want this website fixed. I would yield to anyone that would disagree. Seeing no one accepting that, I am glad to hear that we agree with this. Now Madam Secretary, what can Congress do to work with you to fix this website?
Sebelius: Well, I’m not sure that there is hands-on work that you can do; maybe we have some technical expertise. But I would say getting accurate information to constituents is helpful, letting people know that they can check out the facts in the law, that they may be entitled to some financial support, that cancellation of policies means that the policy they had may not exist but they have a lot of choices of new policies and a law that now says they must be insured in a new policy – that they don’t have to be insured by their company at a higher price.
Luján: I appreciate that Madam Secretary. Going back to the individual marketplace, Madam Secretary, did this Congress in previous years before the Affordable Care Act make it illegal for health insurance companies to raise rates on someone after they submitted a claim for going to the hospital or becoming sick or getting rid of pre-existing conditions.
Sebelius: No sir.
Luján: Madam Secretary, one last note here. It seems that we’ve received some horrible news that there are bad actors already taking place – fraudulent websites that imitate the health care exchange or misleading seniors into disclosing their personal information. I’ve signed onto a letter to you, led by my colleague Representative Raul Ruiz out of California, to request that you prioritize fraud prevention efforts. What has the administration done to prevent these fraudulent acts and protect personal information?
Sebelius: I can tell you, Congressman, that the President felt very strongly that that needed to be part of our outreach effort, which is why the Attorney General and I convened representatives of state Attorneys General, Insurance Commissioners, the U.S. Attorneys, and the Justice Department, and the Federal Trade Commission – which has jurisdiction – to make sure that we first got out ahead some of this, developing consumer outreach. No one should ever give personal health information because personal health information is not needed for these policies any longer. That is as red flag. We want to make sure that people turn over potential fraudulent acts. We have put training in place for navigators. We have our law enforcement folks doing outreach.