Benefits and Compensation

HHS Secretary Says Sorry Over Failed Launch of Health Care Reform Website

In apologizing for the failed launch of the healthcare.gov website, U.S. Health and Human Services Secretary Kathleen Sebelius conceded to a House committee panel that accessing the site has been a “miserably frustrating experience for way too many Americans.” She expressed frustration regarding the flawed launch of the site, to be used to purchase affordable coverage that covers what the government calls “essential health benefits.” She added that she is accountable for fixing the problems and will continue working “day and night” until it is fixed.

The website would be fixed by the end of November, she said, repeating what other administration officials have said. Problems remain in the form of bugs that cause the system to stop working, slow page loading time and an inability to compare plans before submitting an application for coverage.

However, she also said that since Oct. 1 (the site’s official start date), the website has improved its ability to process applications, and the ability to shop and sort through plans is improving. She was testifying at an Oct. 30 hearing of the House Energy & Commerce Committee.

Mandate Has Employers Nervous

Ralph Hall, R-Texas, said at the hearing that small companies with between 50 and 100 employees that are subject to the employer mandate but presently do not provide health benefits could be put out of business because of the mandate to start providing health coverage. Such companies have bad choices, Hall said: (1) fire employees to get under 50 workers; (2) pay a penalty which they’d have to pass on to customers; (3) raise prices to customers to cover the new coverage; (4) or convert full-time to part-time workers who do not have to be covered by the plan. Hall reported that one constitutent told him that raising prices to cover the higher health coverage cost would result in the constituent’s company going out of business.

Sebelius replied that penalties won’t commence until 2015, so that conundrum is on hold for one year, while the agencies implementing health care reform negotiate with businesses to find a way to make the employer mandate work better.

Promise Broken, GOP Lawmakers Say

Other GOP lawmakers stated that insurers are discontinuing individual plans and hundreds of thousands (maybe millions) of Americans are receiving notices that their individual policies are cancelled. People who are affected this way are unable to sign up on websites to ensure continuous coverage. This puts them in a precarious period of non-coverage. When they sign up for new coverage on exchanges, they are finding premium hikes because mandated exchange coverage with more benefits is more expensive than cancelled policies that offered fewer benefits. The lawmakers are hearing from constituents about the results: Families have to crowd out expenses that are necessary for their kids and households.

Chairman Fred Upton, R-Mich., said the situation is “totally undermining” the President’s promise that: “if you have insurance you like, you can keep it.” He said rules allow cancellation of individual plans that don’t comply with the law by providing essential health benefits.

“Believe it or not, more people are receiving cancellation notices in just three states than are applying in all 50 states. This is not what health reform promised,” Upton said on his web page.

Rep. Marsha Blackburn, R-Tenn., noted that many people want cheaper, less comprehensive coverage. Denying them the right to do that and that forcing them pay much more to get complete coverage is inappropriate.

Sebelius has been facing mounting pressure from high-ranking Republicans to resign. Sen. Lamar Alexander, R-Tenn., the ranking Republican on the Senate Finance Committee, made such a call on Oct. 29.

Successes Other than Website

Sebelius said in spite of the website debacle, health care reform has ensured cheaper prescription drugs for senior citizens on Medicare Part D, better individual market products without the possibility of being refused coverage because of pre-existing conditions and fewer invasive questions about health history during enrollment for individual and small-group coverage. She also said that cost increases for health coverage are far less than they have been in previous years.

Also softening the problem of online enrollment is the fact that the government allows six months for open enrollment, which is much longer than most employer plans allow, she said.

For more information on the employer mandate, see Section 400 of the New Health Care Reform Law: What Employers Need to Know. For more information on health exchanges and the healthcare.gov website, see Section 800.

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