* HHS says exchanges on track for Oct 1 enrollment
* Senators openly concerned about potential costs
* Democrat says millions of families could "get pounded"
By David Morgan
WASHINGTON, Feb 14 The Obama administration on
Thursday assured U.S. lawmakers that it is on track to enroll
millions of people in new state health insurance markets, but it
quickly came under fire from Republicans and Democrats about how
costly the coverage may be.
Gary Cohen, the Department of Health and Human Services
official responsible for implementation of the markets known as
health exchanges, told a Senate panel the online marketplaces
would meet an Oct. 1 enrollment deadline in all 50 states.
"We are making great progress. We are on track and we will
be ready for people all across the country," Cohen said at a
hearing of the Senate Finance Committee, one of several
congressional panels that oversee healthcare.
The exchanges, being set up under President Barack Obama's
healthcare law, are scheduled to start providing subsidized
private coverage on Jan. 1, and could attract up to 26 million
customers during the next decade, according to the nonpartisan
Congressional Budget Office.
CBO estimated that another 12 million people will obtain
coverage through a planned expansion of the Medicaid program for
Seventeen states and the District of Columbia have won
conditional approval to operate their own exchanges, leaving the
administration to operate federal exchanges in the remaining 33
states. States have until Friday to opt for a federal
partnership exchange that would allow them a role in certifying
health plans and determining the eligibility of applicants.
Some Republican-led states have rejected both the exchanges
and the Medicaid expansion.
With eight months to go before open enrollment, lawmakers
expressed concern about affordability of the coverage.
Senator Orrin Hatch, the panel's senior Republican, cited
studies projecting a 30 percent to 40 percent premium increases.
He said that while federal subsidies would mitigate higher rates
in most cases, four in 10 consumers may not qualify for
assistance. And premium increases could be far higher in some
"If the point of the healthcare law was to reduce costs and
increase access, these estimates show that it appears to have
already failed," said the Utah Republican, an outspoken critic
of the healthcare law.
The administration contends that premium costs will be held
in check by larger risk pools, greater competition and subsidies
in the form of premium tax credits.
"There are a lot of provisions in the law that are going to
keep premiums affordable," Cohen, deputy administrator of HHS'
Centers for Medicare and Medicaid Services, told reporters.
But Senator Ron Wyden warned that lower-income families may
have a hard time finding affordable insurance because federal
assistance would be pegged to the cost of individual coverage
instead of family coverage, which is often far more expensive.
"These people are going to get pounded," said Wyden, an
Oregon Democrat. "They're really in this kind of no-man's land
where they are unable to afford the family coverage offered
through their employers and ineligible for subsidies that could
be used by dependents on the exchange."
The situation could be especially tough in states that fail
to adopt Medicaid expansion, leaving millions of low-income
people to obtain coverage through the exchanges.
Cohen said the administration is considering giving states
flexibility to address the situation. He said HHS also would
look at allowing workers to use employer contributions to meet
the cost of family coverage on the exchanges.
Cohen told lawmakers the administration will accept
insurance plan applications for federal exchanges from March 28
to April 30 and determine which plans to accept by July.
Meanwhile, some of the harshest criticism came from two
Democrats who slammed the administration for not moving ahead on
a reform provision that allows states to offer low-cost public
insurance, or basic health programs, beginning in 2014.
Advocates see public plans as a measure that could drive
insurance costs down 10 to 15 percent. But Cohen said basic
health programs would not become available until 2015, a year
later than the law mandates.
"You're trying to lure states out of pursuing these basic
health plans and onto the exchanges," said Senator Maria
Cantwell, a Washington Democrat.
Democratic Senator Bill Nelson of Florida said HHS should be
held accountablre for the slow implementation that has provided
funding for basic health plans in just 24 states.
"If this is the kind of implementation we're going to see,
then we're not going to fulfill the goal that we all set when we
so laboriously put together ... this healthcare bill," he said.
Cohen told lawmakers that fiscal cliff legislation approved
by Congress at the start of the year denies HHS the authority to
fund basic health plans in states beyond the 24 where they are
now being established.
(Reporting by David Morgan; Editing by David Gregorio)