Obama Administration Grilled About Insurance Markets In House Hearing

It was akin to being called to the principal’s office to find out why the pupil was late with her homework.

Top Obama administration officials were called before a House subcommittee Thursday to answer questions about the implementation of the president’s landmark health law, and what Republicans say is a lack of clarity over how online insurance markets and a massive expansion of Medicaid will work.

Health officials from Republican-led states Louisiana, Wisconsin and Pennsylvania testified the law’s timelines are unrealistic, and many of its requirements too rigid or unclear.

“In all my years of public service, I have yet to witness a law so vast with such breathtaking scope, demands on state resources and lack of federal guidance,” Gary Alexander, who oversees Pennsylvania’s Medicaid program, told the House Energy and Commerce subcommittee.

But Medicaid officials from Democrat-led Maryland and Arkansas testified they were looking forward to moving ahead with the law.

“We’ve had terrific interaction with CMS,” said Joshua Sharfstein, secretary of Maryland’s Department of Health and Mental Hygiene, referring to the Centers for Medicare & Medicaid Services. “We have taken advantage of their regular consulting … and what’s impressed us is they have met us where we are and they are willing to move at the speed we are moving.”

The hearing came a day before the deadline for states to decide if they want to build a state-based insurance exchange that must be ready to enroll consumers and small employers by October 2013, for coverage beginning  Jan. 1, 2014. Only about 15 states have said they will do so — the rest will partner with the federal government or let the federal government run everything.  By law, the administration has to approve state exchanges by Jan. 1, 2013.

States are also weighing whether to expand Medicaid in 2014 to millions of poor adults under the law.  Several, including Georgia and Louisiana, have said they are unlikely to do so. The federal government is paying all the costs for the newly eligible people through 2016 and no less than 90 percent after that. Medicaid is jointly financed by the federal government and the states, with the federal government paying 56 percent of the costs on average.

“This will be a very good financial deal for the state of Arkansas,” said Arkansas Medicaid Director Andy Allison.

Republican lawmakers and Medicaid directors from states led by GOP governors said they want more details on how the federal government will run insurance markets in their states — and how state agencies will have to interact with them. Republican governors in Louisiana and Pennsylvania have said they won’t set up state-based insurance markets under the law, deferring to the federal government. Wisconsin has not declared its intentions.

“We are not confident that the federal government has adequately prepared for handling an unprecedented number of applications, verifications and enrollments,” said Dennis Smith, Wisconsin’s Medicaid director. “This leaves us uncertain on whether the federal government will be ready to effectively administer this program less than 10 months from now.”

Administration officials said they have bent over backwards to work with states to provide rules and guidance about how to implement the law, which passed in March 2010. They said they have hosted 119 events for states about exchanges, including 69 webinars, 38 teleconferences and two in-person conferences.

“We are on the phone every day with people from the states answering their questions and enabling them to move forward,” said CMS Deputy Administrator Gary Cohen.

Citing a New York Times story, Rep. Michael Burgess, R-Texas, said the administration appeared to delay releasing rules over what “essential health benefits” must be covered by health plans selling products in the new markets until after the presidential election. Cohen said that was not the case.

“It has been hard to get information out of your agency,” Burgess insisted.

At one point, Burgess asked if it was true that there had been a presidential election Nov. 6. “Yes, the president won re-election,” Cohen replied.

Democrats on the subcommittee dismissed the criticisms, saying that Republicans were merely trying to delay or impede the law’s implementation after failing to overturn it in the Supreme Court or through the presidential election.

“For some states, no information will ever be enough,” said Rep. Henry Waxman, D-Calif. “And that is the tragedy of politicizing a law that will benefit so many Americans.”