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Obamacare: Fear, doubt and confidence crisis, Dem senator warns

A top administration official assured a Senate committee Tuesday that the administration has a plan to restore confidence in the Affordable Care Act and recruit young people to enroll in the new insurance marketplace once HealthCare.gov, the glitchy Obamacare marketplace website, is running smoothly.

"Our goal is to stabilize this website this month," Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services (CMS), told the Senate Health, Education, Labor, and Pensions (HELP) Committee. Once that's complete, the administration plans to roll out a "targeted plan" to encourage young people and other contingents of largely uninsured Americans. Asked if the Obama administration can restore confidence in the law, Tavenner said unequivocally, "Yes."

Tavenner was responding to concerns from Sen. Barbara Mikulski, D-Md., who told her the rollout of the Obamacare marketplace "has been more than bumpy."

The botched website launch, combined with the fact that millions of Americans on the individual market are being dropped from their plans, has created "fear, doubt and a crisis of confidence," Mikulski said, noting that around 73,000 people in her state of Maryland alone have reportedly had their plans cancelled.

"What I worry about is there's such a crisis of confidence, that people won't enroll... particularly our young people," Mikulski said.


Estimated Number of People Eligible for Premium Tax Credits Under the Affordable Care Act


Source: The Henry J. Kaiser Family Foundation


The new marketplace has only been open for one month, and the open enrollment period lasts through the end of March, so it's too early to judge enrollment levels on the marketplace. However, insurers say that the people enrolling so far are older than expected, the Wall Street Journal reports.

Premiums on the Obamacare marketplace at this point are lower than they were predicted to be, but without a sufficient pool of younger, healthier people joining, the cost of premiums on the market would presumably rise. Some have expressed concern that rising premiums would drive even more healthy people out of the market, creating a vicious cycle that would crash the new marketplace -- that, however, is unlikely because of mechanisms built into the law. Still, premiums could increase and the cost to consumers and taxpayers could be higher than expected.

Tavenner said that the media campaign to invite young people to join the marketplace won't start until HealthCare.gov is running smoothly by the end of this month. On top of that, the administration plans to reach out to people who tried but failed to enroll in a plan on HealthCare.gov in the first week after its Oct. 1 launch.

"We're going to reach back out to them and invite them to come back," Tavenner said, remarking the administration has made significant improvements to the website since then.

A number of senators complained to Tavenner about the ongoing problems their constituents are facing with Obamacare. Sen. Lisa Murkowski, R-Alaska, said that according to a recent estimate from Enroll Alaska, a business designed to help Alaskans enroll on the new, federally-run marketplace, just three Alaskans have been able to enroll so far.

"Exactly three Alaskans," Murkowski said.

On top of that, those three people have been given incorrect information about the subsidies they'll receive to help pay for their coverage. Enroll Alaska is asking the Obama administration to pull down HealthCare.gov and redeploy it when it's fixed, the senator said.

"These are the folks that want the website to work," she said.

Tavenner responded that the problems with subsidy calculations that Murkowski referenced were specific to Alaska and that CMS is working on fixing them.

Sen. Lamar Alexander, R-Tenn., the top Republican on the committee, said he's primarily concerned about the fact that millions of Americans are being dropped from their plans on the individual market because the plans no longer meet the minimum coverage standards set by Obamacare. Republicans have slammed President Obama for promising that those who liked their insurance before the passage of Obamacare would be able to keep it -- a promise that Mr. Obama and his administration have stood by.

The president and his team have pointed out that existing insurance plans were "grandfathered in" -- though once an insurance provider made changes to the plan in question, it had to meet the new Obamacare standards.

Alexander, however, pointed out that the administration's own estimates showed that a large portion of plans would have to eventually be dropped, given the limited flexibility granted to grandfathered plans.

"They effectively made it impossible to grandfather a lot of the plans people had," Alexander said. "In effect, didn't you know in 2010 there would be a big turnover in these policies, and it was wrong" to suggest otherwise?

Tavenner pointed out that there's always been significant "churn" in the individual market, meaning that plans are changed -- dropped -- all the time, with or without Obamacare.

She also noted that while insurers may be dropping plans, they are also offering consumers new plans. Additionally, those consumers can shop for competitive plans from other insurers on the new marketplace. The majority of consumers who shop on the marketplace will either qualify for Medicaid or qualify for subsidies, making the plans even cheaper, she pointed out.