Insurer CEOs head to White House to talk Obamacare troubles

October 23, 2013

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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