Baucus sees insurance exchange 'train wreck' ahead

The primary author of the 2010 healthcare overhaul is worried that the health insurance exchanges planned for launch this year are headed for a “train wreck.”

Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, said Tuesday that the lack of details provided to him and the amount of confusion he had heard from constituents indicate that the Obama administration will not launch health insurance exchanges in all 50 states on time. One of the key features of the Patient Protection and Affordable Care Act, the health insurance marketplaces are scheduled to begin enrolling millions of subscribers in private plans beginning Oct. 1.

“I see a huge train wreck coming,” Baucus said during HHS Secretary Kathleen Sebelius' annual appearance to discuss President Barack Obama's budget.

Baucus said small-business representatives have told him they know nothing about the exchanges, which are partially intended to provide coverage to many small businesses' employees.

He pressed Sebelius for timeframes and benchmarks to demonstrate progress in implementing the law. But most of her department's implementation benchmarks are linked to the success of enrollment later this year, she said.

“We are on track to fully implement the marketplaces in January 2014 and be open for open enrollment,” Sebelius told reporters after the hearing.

Sebelius defended the administration's earlier decision to delay for one year a component of the so-called SHOP exchanges for small businesses. Small-business employees will have to use whatever subsidized insurance coverage is selected by their employers through the Small Business Health Options Program, but employees will have to wait to select their coverage until 2015.

Meanwhile, Sebelius partially blamed the lack of public knowledge about the law on Congress' rejection of $1 billion for the law's implementation that the administration requested as part of the end of the year spending deal. She said some of that funding was slated to go to public “outreach” regarding the exchanges and other provisions. The administration requested $1.5 billion in such funding in the president's recently released budget.

Also, Sebelius anticipates that $54 million slated for navigators, who will be paid to help connect people with insurance options—such as exchanges coverage—will improve public understanding and functioning of the exchanges.

“People will be on the ground this summer,” Sebelius said.

However, Sebelius said it is unknown how many navigators will be hired but specified that they would focus on the 26 states with federally operated exchanges. Another seven states will have marketplaces at least partially operated by the federal government. The administration's budget also drew bipartisan criticism for many of the $400 billion in 10-year healthcare cuts it included.

For instance, Sen. Robert Menendez (D-N.J.) said he was concerned that many of the drug cuts in the budget would result in reduced pharmaceutical research and increased costs for consumers. The budget would derive $169 billion of the $400 billion in reduced Medicare spending over a decade from various pharmaceutical cuts.

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