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Filed Under:Markets, Employee Benefits

Cohen: PPACA reveals costs that are already here

Gary Cohen today defended the Patient Protection and Affordable Care Act (PPACA) health insurance access provisions against analyst predictions that PPACA will increase the cost of commercial health insurance.

PPACA will change the way the country classifies and thinks about existing health care cost drivers, and it should help control some of the factors that are making care more expensive than it has to be, Cohen said today at a hearing on PPACA organized by the Senate Finance Committee's health subcommittee.

Sen. Tim Scott, R-S.C., asked Cohen about Oliver Wyman analysts who are predicting that PPACA health insurance underwriting and pricing rules that are supposed to take effect in 2014 could increase the average premium for policyholders ages 21 to 29 by 29 percent.

The analysts also are predicting the PPACA-related fees and taxes could increase premiums for all enrollees by an average by about 1.9 percent to 2.3 percent in 2014, and by 2.8 percent to 3.7 percent in 2018 and later years.

Cohen -- the director of the federal Center for Consumer Information & Oversight (CCIIO) (pronounced, "Sih-Sigh-Oh), the agency in charge of helping the Centers for Medicare & Medicaid Services (CMS) implement the PPACA health insurance market provisions -- told Scott that he believes the analyses about the effects of PPACA on the cost of commercial health insurance fail to reflect the effects of PPACA on the cost of the U.S. health care system as a whole.

"We're paying that cost now in the form of uncompensated care," Cohen said. "Every small business in America that offers health insurance is paying that cost. They're paying more for their insurance because there are people who don't have insurance, and they're showing up at the emergency room. They're getting care, and it's not compensated."

The hospitals end up getting the money from other payers, Cohen said.

In other cases, Cohen said, the cost of problems with the current system show up in the form of uninsured people who go without necessary preventive care and end up needing, and getting, expensive care paid for by government programs or increases in the charges imposed on insured patients.

When Sen. Tom Harkin, D-Iowa, asked about how CCIIO will get more young, healthy people to pay for health coverage, Cohen said his agency is ramping up outreach efforts now.

"We're working very closely with the agent and broker community across the country to make sure they understand the opportunity this presents for them to bring in millions of people into coverage," Cohen said.

Cohen told another senator that insurance regulators in the states that are not setting up their own exchanges seem to have a sincere interest in helping the "federal exchanges" that CCIIO and CMS are setting up succeed.

"They understand, first, that this is the law of the land, and that the time for debating it is over, and, second, that they want to make this work for the citizens of their states," Cohen said. 

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Nichole Morford
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