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Insurer CEOs head to White House to talk Obamacare troubles

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Health insurance executives, including WellPoint Inc. CEO Joseph Swedish, will meet with top White House officials Wednesday as President Barack Obama seeks to contain political damage over the rollout of the online enrollment for his health-care expansion.

The insurance executives will meet with White House Chief of Staff Denis McDonough and Valerie Jarrett, a senior adviser to President Barack Obama, according to Robert Zirkelbach, a spokesman for industry lobbying group America’s Health Insurance Plans. Swedish, leader of the second biggest U.S. health plan, will attend, Kristin Binns, a spokeswoman for Indianapolis-based WellPoint, said.

Health insurers stand to gain millions of customers in an expansion of private insurance options and the Medicaid program under the Patient Protection and Affordable Care Act of 2010. The industry has raised alarms since Oct. 1 about faulty data they’ve received from the online federal exchange, which could keep consumers from getting the coverage they thought they had purchased come next year.

“We have a common goal of increasing access and affordability for health care,” Swedish said on a conference call with analysts Wednesday. While the exchanges have had a “choppy” opening, WellPoint “remains optimistic” about the long-term opportunities.

The White House didn’t immediately respond to requests for comment about the meeting, which isn’t listed on the president’s public schedule. It wasn’t clear whether Obama would drop by the meeting.

Obama Tuesday drafted his soon-to-be top economic adviser, Jeffrey Zients, to help fix the flawed online U.S. health insurance marketplace. The exchange, which serves 36 states, has been plagued by technical issues since it opened Oct. 1, preventing many consumers from signing up for a plan. Fourteen state-run exchanges, including systems in California and New York, have performed better.

Public interest in the new coverage “appears robust,” WellPoint’s Swedish said on the call, which followed the company's quarterly earnings announcement. The company got 35,000 calls at its service center during the first week after the exchanges opened, double its usual volume, the CEO said. Some 45,000 calls came in the second week.

Shares in WellPoint, which covers 35.5 million people, fell 2.9 percent to $85.85 at midday, and other carriers slipped as well. Swedish declined to give specific enrollment figures for the exchanges or a profit forecast for 2014, said Thomas Carroll, a Stifel Nicolaus & Co. analyst in Baltimore.

“Companies are being just ultraconservative with respect to assumptions on exchange enrollment, the composition of that enrollment and what kind of Medicaid expansion we’ll see,” Carroll said.

Republicans, whose opposition to the law led to a partial government shutdown, will hold two congressional hearings on the website over the next week. The administration has already changed the direction of its rescue work on the site, creating a hit list of upgrades they seek to check off in the coming weeks while bringing in Zients and other advisers.

Spokesmen for UnitedHealth Group Inc., the biggest health insurer, and Aetna Inc., the No. 3 carrier, didn’t immediately respond to queries on whether they would attend the meeting.

Insurers have much at stake in the law. The online exchanges, where people can buy private plans with government subsidies, represent a potential windfall of $205 billion a year in added sales by 2021, according to a report last year from PricewaterhouseCoopers LLP.

The danger from the flawed exchange is that it discourages young and healthy customers from enrolling, threatening the financial stability of the market, Mark Bertolini, the CEO at Hartford, Conn.-based Aetna, said during an Oct. 14 interview with CNBC.

“We’re in a place now where there’s so much wrong you just don’t know what’s broken until you get a lot of it fixed,” he said of the exchange. “We just have to plow through it.”

Sewdish, on his call, said “there are some challenges going through the application and enrollment process. We knew there would be choppiness going in.”

Centene Corp., which sells exchange plans in nine states, said yesterday that some of the problems may be clearing up. While some issues remain, the St. Louis-based insurer is “not seeing enormous problems right now” with data quality, K. Rone Baldwin, an executive vice president, said on a conference call with analysts.

Centene has adjusted its expectations for early enrollment, seeing “more of a slow ramp as opposed to a big bang,” Baldwin said.

“There is still lots of time,” he said. Still, “as we get into November, it becomes a little bit more concerning.”

 

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  • Problems
    Trying or "sruggling/failing" to fix problems since taking office?
  • Obamacare/ACA epic policy flaws can't be easily fixed
    President Obama Monday Rose Garden speech replayed the same talking points he has been using for more than 3 years about the ACA, while offering old tech suggestions such as telephone help lines and paper applications to work around the law's inadequate website. Enrollment in Obamacare/ACA insurance ultimately does not depend upon the website problems being fixed, because information gathered via phone and paper must be entered into massive HHS and IRS (once they figure out how to check /verify income eligibility) databases to eventually check eligibility. A delay of the individual tax penalties will be inevitable if the site isn't fixed soon; you can't penalize people if they can't enroll. But eventually the software can be fixed Yes linguistically, a glitch is easily repairable and people are used to experiencing glitches on websites. But the policy flaws in the ACA are not small repairable “glitches”. Obamacare/ACA epic policy flaws can't be easily fixed. The problems are going to be up close and personal, as people see for themselves the impact it has on their lives and pocketbooks. The top four disasters to come include: 1. Deductible shock-after premiums go up the next price shock will be deductibles. The policy design is a direct result of the law's instructions about the percentage of average health costs that insurance must cover (60% for Bronze, up to 90 % for platinum health plans). The result Americans, who choose the relatively lower monthly premiums, probably in part to avoid rate shock, will be forced to pay much higher deductibles. 2. Attracting the sickest. Sicker Americans with high health cost, are the ones most determined to get through to Healthcare.gov website to enroll. If they dominate enrollment as expected by health insurance/health care experts, premiums will have to rise in 2015, discouraging even more young healthies from applying in the future. The industry calls this the "death spiral". 3. Will people pay? When people see they have to pay several hundred dollars a month for a plan with these huge deductibles will they pay the premiums? Many will find it hard to fit the increases in their already strained family budgets. 4. Less expensive plans will vanish. Many people just want to stay with their current plan. But people are being notified about their current insurance being cancelled because the policies don't comply with ACA benefit mandates. It is unfortunate and will be an extremely expensive lesson that we are all going to have to actually experience and pay for all these things before we become educated in a first hand way on the economic effects and realities of the ACA.
  • Doomed Affordable Care Act ushering in Single Payer
    Subsidizing the insurance companies by the taxpayer is ridiculous! From the article above: The online exchanges, where people can buy private plans with government subsidies, represent a potential windfall of $205 billion a year in added sales by 2021, according to a report last year from PricewaterhouseCoopers LLP. No wonder the CEO's are running to the White House. Failure by the government to make exchange setup easy with numerous problems with the website is a joke. Unfortunately, the joke is upon the said insurance companies. Look at the recent articles from the IBJ about the local hospitals shedding jobs. Sacrifice one industry for another...great free market economy. Welcome to single payer citizens of Indiana and United States America.
  • Not slanted
    The story is from Bloomberg News,not from IBJ, and Bloomberg typically leans left. Even liberal commentators are calling the massive computer failures a disaster.
  • IBJ is Slanted
    "contain the political fallout" is a slanted, loaded, opinionated statement. "Fixing the problems" is not. The first is a statement of opinion, the second is journalism. It is a shame the IBJ does not any longer practice journalism.
    • Oh really?
      I note the previous commenter chastised the President and Wellpoint for trying to "contain the political fallout". My problem with this article is that the writer decided to use those words ("contain the political fallout") rather than saying the President wanted to fix the problems, which is probably closer to the truth. To me this is just another typical hack job for political purposes.
      • Health Insurance
        Wellpoint ex going to DC to contain the political fallout?? Always thought it was about people not protecting one's....these "guys" are suppose to be public servants but obviously the only reason people are in DC is to protect their nest egg.

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